REG - Reabold Resources - West Newton Update

Reabold ResourcesAnnouncement

13/06/2024 07:00

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RNS Number : 2287S  Reabold Resources PLC  13 June 2024

13 June 2024

 

Reabold Resources plc

 

("Reabold" or the "Company")

 

West Newton Gas Export Feasibility Study and Revised Work Programme

 

 

Reabold Resources plc, the investing company focussed on developing strategic
gas projects for European energy security, is pleased to announce the results
of the West Newton Gas Export Feasibility Study (the "Study" or the
"Feasibility Study"), conducted by independent energy consultants CNG Services
Ltd.  The Study has concluded that as a precursor to the intended West Newton
full field development, an initial single well development and gas export plan
could accelerate production and cash flow whilst requiring limited capital
expenditure.

 

In addition, the North Sea Transition Authority ("NSTA") has approved a
revised work programme for PEDL 183 onshore UK, which contains the West Newton
field.

 

The Feasibility Study:

 

·      Confirms the technical and economic viability of a single well
development plan, with:

o  Initial gas production from a single horizontal well

o  Gas processing through a modular plant, and

o  Sales gas tied in from the West Newton A site to the National Transmission
System at an existing above the ground installation via a 3.5 kilometre
pipeline

 

·      Concludes a single well development has excellent project
economics benefitting from:

o  Early cash flow with the ability to drill future development wells out of
cash flow generated

o  Low capex for the associated project infrastructure, estimated at ca.
£12m, and

o  An attractive NPV(10) of ca. £33m and an associated IRR of 29%

 

·      First gas soon after drilling and completing a producer well, to
be within 18 months from completion of drilling the next well at West Newton

 

Although the early production demonstrates highly attractive standalone
economics, it is envisaged that it will be a precursor to the full field
conceptual development plan as previously disclosed, which, under current
conditions, has an associated pre-tax NPV(10) of ca. US$179m (approximately
£140m), net to Reabold.

 

NSTA Approved Revised Minimum Required Work Programme for PEDL 183:

 

·      Re-enter and recomplete or sidetrack one of the currently
suspended wells on or before 30 June 2026

·      Re-enter and recomplete or sidetrack one of the remaining
suspended wells or drill and complete a new deviated or horizontal well on or
before 30 June 2027, and

·      Submit a field development plan on or before 30 June 2027

 

 

The joint venture ("JV") partnership for PEDL 183 is likely to approve a
forward plan, which will initially consist of the re-entry and recompletion of
an existing West Newton well in order to establish sustained gas flow. The JV
partnership believes this is a low risk and low cost approach to derisk the
project and Reabold will update the market on the planned activity at West
Newton.

 

The JV is fully funded for re-entry and recompletion and operational activity
is anticipated to commence during 2024. Further updates will be provided in
due course.

 

Reabold holds a ca. 56% economic interest in West Newton and PEDL 183 via its
ca. 59.5% shareholding in Rathlin, which, in turn, has a 66.67% interest in
PEDL 183. In addition, Reabold has a 16.665% direct licence interest in PEDL
183.

 

 

Sachin Oza, Co-CEO of Reabold, commented: "The CNG Feasibility Study
highlights the opportunity to unlock significant near-term value from the West
Newton project through the early production plan. The study confirms that the
early production plan is both technically robust and economically attractive
with a low capex requirement.

 

"This phased development plan allows gas production to be brought to market
within months of drilling, generating significant early cash flow whilst we
progress the full field development plan.  With the industry currently
suffering from a lack of available development capital, the ability to achieve
early production with limited capex is strategically extremely valuable.

 

"With the necessary approval from the NSTA for the revised work programme for
PEDL 183 secured, Reabold can continue to progress this important UK gas
project in the most optimal manner."

 

This announcement contains inside information for the purposes of the UK
version of the market abuse regulation (EU No. 596/2014) as it forms part of
United Kingdom domestic law by virtue of the European Union (Withdrawal) Act
2018, as amended.

 

ENDS

 

 

For further information, contact:

 

 Reabold Resources plc                                        c/o Camarco

 Sachin Oza                                                   +44 (0) 20 3757 4980

 Stephen Williams

 Strand Hanson Limited - Nominated & Financial Adviser        +44 (0) 20 7409 3494

 James Spinney

 James Dance

 Rob Patrick

 Cavendish - Broker

 Neil McDonald                                                +44 (0) 20 7220 0500

 Pearl Kellie

 Camarco                                                      +44 (0) 20 3757 4980

 Billy Clegg

 Rebecca Waterworth

 Sam Morris

 

Notes to Editors

 

Reabold

Reabold Resources plc has a diversified portfolio of exploration, appraisal
and development oil & gas projects. Reabold's strategy is to invest in
low-risk, near-term projects which it considers to have significant valuation
uplift potential, with a clear monetisation plan, where receipt of such
proceeds will be returned to shareholders and re-invested into further growth
projects. This strategy is illustrated by the recent sale of the undeveloped
Victory gas field to Shell, the proceeds of which are being returned to
shareholders and re-invested.

 

CNG Services Ltd

CNG Services Ltd (CSL) provides consultancy, design and build services to the
gas industry, all focused on reducing Greenhouse Gas (GHG) emissions. CSL only
works on projects that reduce GHG.

 

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