Reabold Resources (LSE:RBD) announced the completion of its investment in Rathlin Energy (UK) Ltd today. The investment is for 37.08% of Rathlin who hold a 66.67% equity interest in the PEDL183 license UK onshore. The license contains the significant West Newton A-1 gas discovery with a Best Estimate Contingent Resources of 189 Bcf of gas equivalent or 31.5 million barrels of oil equivalent (boe).
An appraisal well is planned for the first half of 2019 which will test two targets. the first target is the Kirkham Abbey Formation gas discovery which has an estimated 72% chance of success (CoS) and, according to Connaught, has a Net Present Value (NPV) of $247m. The second target is a deeper Cadeby Formation reef flank oil prospect, considered to have an NPV of $850m and an estimated 24% CoS.
Reabold’s investment was conditional on Connaught Oil & Gas agreeing to settle a liability of £33.8 million owed to it by Rathlin and the finalisation of a farm out, by Rathlin, of Licence PEDL183 to Union Jack Oil, (LSE:UJO) which was also announced today.
Stephen Williams, Co-CEO, commented:
“Sachin and I are delighted to have successfully completed our investment in Rathlin. We view this as a highly opportune moment to invest in this premier UK onshore opportunity.”
“With a dual-target appraisal well planned to begin in H1 2019, we look forward to working closely with Rathlin and updating shareholders as further operational progress is completed over the coming months.”
In an additional announcement, Reabold also confirmed that it has exercised options to subscribe for 375,940 shares of Danube Petroleum Limited at £1 per share. The transaction increases Reabold’s interest in Danube to 33% from 29%. The funds will be used for the drilling of the Parta Appraisal Wells in the first quarter of 2019.
Danube purchased the Iecea Marea Production Licence, upon which the Parta wells will be drilled, in October this year. The company believes the purchase will provide them with the ability to organically develop other high-value gas production opportunities in the area. It also enables the opportunity for a rapid tie in of gas production given the close location of the active Calacea gas plant.
ASX-listed ADX Energy which owns the remaining 67% of Danube is committed under the Subscription Agreement to match Reabold’s investment in Danube on the same terms.