Nido Petroleum Limited has signed a Heads of Agreement (HOA) and Area of Mutual Interest Agreement (AMI) with Norwest Energy NL.
Under the terms of the HOA, Norwest Energy NL will reimburse certain costs and carry Nido through its first two-year work program to a maximum of $300,000 to earn a 50% interest in Block 48/1a (part) and Block 48/2b (part).
With immediate effect, Nido will be undertaking a Joint Partnership Agreement (JPA) with Norwest, which it anticipates will be executed by the end of this month. The first two-year work program is obtaining 3D seismic over the blocks, reprocessing it to PSDM and interpretation. Evaluation of the gas discovery well 48/2-1, which encountered a 120m of gas bearing reservoir section and flowed gas at up to 2.7MMcfd, will also commence immediately.
This agreement is part of Nido’s strategy to maintain a significant participating interest, in this case 50%, while reducing its exposure to work program costs. Nido has now achieved risk mitigation and a sensible investment risk for Nido in these blocks and its Block 47/9C where it also has a 50% participating interest with the UK Company, Corsair Petroleum.
As part of the HOA, Nido and Norwest will also work under an Area of Mutual Interest (AMI) to jointly pursue other North Sea opportunities. Both Nido and Norwest have been pursuing other opportunities in the North Sea and given the size of interests available, the companies believe that by working together they will be able to be more effective in strengthening their acreage position in the North Sea.
As a result of the recent policy changes of the UK Department of Trade and Industry regarding Promote Blocks and the “Fallow Field Policy”, small aggressive companies such as Nido and Norwest believe that the North Sea now offers new and significant opportunities.