Oil and Gas juniors awarded an array of exciting licenses across the UKCS in the 31st Offshore Licensing Round (RBD, UOG, BOIL, UPL)

By James Moore


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The Oil and Gas Authority (OGA) has announced its awards under the 31st Offshore Licensing Round with a number of juniors on AIM being beneficiaries. 37 license areas over 141 blocks were awarded to companies large and small across the United Kingdom Continental Shelf (UKCS). Interested parties submitted applications between 10 July and 7 November last year and applicants were chosen on their financial and technical capability in addition to environmental matters.

Reabold Resources (LSE:RBD) continues its very impressive growth story with its 32.9pc investment in Corallian Energy providing significant exposure to five new licenses granted. Two of the licenses, located in the Viking Graben, and West of Shetland basin, are 100pc owned by Corallian with the remaining three partly owned by joint venture partners.

Sachin Oza, Co-CEO of Reabold, praised Corallian in an announcement on Wednesday: 

“The fact that Corallian has been awarded 22 new blocks and part blocks out of a total of just 144 demonstrates the significant capability and experience of its management team in identifying opportunities. In particular, the award of blocks around the Colter discovery is a highly important step for Corallian in realising further potential in the area and ultimately generating value for Reabold shareholders.”

Popular AIM stock United Oil and Gas (LSE:UOG) has been awarded a total of six blocks, four in the North Sea, and two in the English Channel. The central North Sea blocks, in which the firm holds a 100pc interest, cover 500 square km and include a number of targets. The blocks are in a ‘highly prospective region’ close to the Marigold and Yeoman discoveries and the Piper, MacCulloch and Claymore oil fields. One of the blocks in particular, 15/12a lies on the same Balmoral play as United’s own Crown Discovery which is just 10km away.

All licences are awarded on the proviso that certain conditions will be met.  In the case of United Oil, the blocks have been awarded subject to the purchase of an existing 3D seismic dataset and subsequent detailed geological and geophysical analysis. The firm says this will not require much capital and it expects to commence the work programme towards the end of this year or early in 2020. United Oil will also be working alongside Corallian, with a 10pc stake in two blocks in the English Channel. Both have good nearology, with one of the blocks containing the eastern portion of the Colter South Discovery, and the other containing the Ballard Point Discovery which flowed 9.6m standard cubic feet per day (scf/d) of gas back in 1984.

Jonathan Leather, COO of United Oil and Gas said: “The low-risk exploration we have added in the North Sea Blocks is significant in its own right, but also adds value to our neighbouring Crown licence, where we have completed the committed seismic reprocessing and where we are now looking to progress development and commercialisation plans.  The licences added in the English channel mean the partnership now provisionally holds acreage covering the entirety of the recently discovered Colter South structure, as well as adding additional discovered resources and low-risk exploration upside in a basin that has been a focus for United for a number of years.”

Baron Oil (LSE:BOIL) will also be partnering with Corallian as operator on a number of blocks in the Inner Moray Firth and English Channel. The firm has been offered a 15pc interest in three blocks surrounding the Wick Prospect in the Inner Morat Firth North region. The blocks contain the existing Knockinnon discovery drilled in 2000 and a number of interesting prospects. The award offering is subject to 3D seismic reprocessing and will subsequently require a decision to drill within three years to retain the license.

Meanwhile Baron has also been offered 15pc on four blocks in the Inner Moray Firth South area. The blocks include the 12/27-1 discovery where gas previously flowed at 9.5mmscf per day, The Dunrobin Propsect with 187m barrels of oil (mmboe) in Pmean Prospective Resources and the 23.5mmboe Golspie Prospect. Corallian has estimated the chance of success for the Dunrobin and Golspie Prospects to be 34pc and 43pc respectively. The joint venture must reach a decision on drilling within 4 years and reprocess 3D seismic to retain the licenses for these blocks.

Baron takes an 8pc stake in two blocks in the English Channel too. Blocks 98/12 and 98/11b contain the eastern portion of the Colter South discovery as well as the Ballard Point East Prospect and Ballard Point discovery.  Ballard Point flowed 9.6m scf/d of gas when it was drilled in 1984 and block 98/11b also contains the Purbeck Prospect which was partially drilled by BP in 1989.

Finally, Upland Resources (LSE:UPL), listed on the main market, has been awarded permits for the same seven blocks in the Inner Moray Firth area that Baron Oil has been awarded. Upland will hold a 40pc interest in the blocks alongside operator Corallian (40pc), Corfe Energy (5pc) and of course Baron Oil (15pc).

Steve Staley, CEO of Upland Resources Limited, said:

 “I am pleased to be able to announce this offer of award of a substantial area of prospective UK offshore acreage. Though potentially high impact and containing existing discoveries, the Innovate licence approach means that the initial work commitments are not costly. The estimates by Corallian of the recoverable resources speak for themselves.”

The 32nd Offshore Licensing Round will soon be underway with the OGA aiming to formally announce the next round  over the summer of 2019.

Dr Nick Richardson, Head of Exploration and New Ventures at the OGA, remains optimistic on the future operations of the UKCS commenting:

“Exploration on the UK Continental Shelf continues to be revitalised with the results indicating a continuation of the strong interest shown in the previous frontier round, the 29th Round in 2016. It has been very encouraging to see industry generating new prospects and play concepts, and seeking acreage in areas which have never before been licensed, such as parts of the East Shetland Platform, underlining the positive impact of ongoing Government Funded data initiatives.”


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Author: James Moore

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

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