Granby Oil and Gas plc has signed Heads of Agreement with Century Exploration (UK) Ltd to farm in to UKCS Block 9/27a.
Granby will fund 25% of the cost of drilling and testing a well on Block 9/27a to earn a 12.5% participating interest in the Licence. The cost of Granby’s participation in the well is expected to be around £1.25 million, increasing to around £1.6 million if the well is tested. Assignment to Granby is subject to the approval of the Secretary of State for Trade & Industry, and to execution of a fully termed farm-in agreement to be completed shortly.
The Hendrix prospect is a robust four-way dip closed structure with significant additional stratigraphic upside. The initial well will be drilled to a depth of approximately eighteen hundred fifty metres (1,850m) true vertical depth subsea to target the Hendrix prospect in a well defined Palaeocene submarine fan sandstone. The Bredford Dolphin drilling rig is already contracted to Century and is expected to mobilise to drill the well in December 2005. The well is anticipated to take some 3 weeks to drill.
In the event of oil being produced from the block, Granby would be required to pay its share (0.34%) of a pre-existing royalty on gross production.
David Grassick, Managing Director of Granby Oil and Gas, said:
“We are very pleased to participate with Century in this early well which will target the Hendrix prospect. We chose to make our first North Sea farm-in on this block as it has modest risk, is relatively low cost and close to existing infrastructure and has very large upside potential.”
Richard Moreton, Executive Director, said:
“The Hendrix prospect has been known to Granby for some time now and it is very exciting to be participating in a well on this feature. Granby’s participation in this well is consistent with our regional exploration strategy and enables the company to advance its drilling programme for this area of the North Sea.”