London-listed Oilex (AIM:OEX) has acquired the Doyle-Peel licence providing ‘an attractive entry into a proven gas faraway' in the centre of the East Irish Sea Basin (‘EIS’), offshore the United Kingdom.
The group entered into a binding term sheet with Burgate Exploration and Production Ltd to acquire a 100% participating interest in the P2446 licence.
In addition, Oilex has entered into an exclusivity agreement for the potential acquisition of the Castletown licence, also based in the EIS, alongside with Burgate, Comtrack, and Simwell Resources, collectively “BCS”.
With a reservoir depth of less than 2,000 metres and modest drilling costs, the EIS is a ‘prolific basin’ which has produced around 8 trillion cubic feet of gas to date, the company explained.
The licences lie on the west dipping graben edge of the Tynwald Fault Zone in shallow water near existing infrastructure — this will reduce the overall complexity, risk and cost of development at both sites.
Shares in Oilex were trading 12.82% higher at 0.22p on Monday morning.
Pursuant to the award of Doyle-Peel, which include Blocks 113/22a and 113/27e merged into a single licence, the committed work programme comprises a firm commitment by October 2021.
During this time, the company will work to obtain and reprocess 50 square kilometres 3D seismic data, obtain 2,500 kms Aeromagnetic data and complete a Rock Physics study, with a three-year drill or drop election to follow.
“Importantly, the Doyle-Peel licence is the Company's first committed entry into the UKCS (the UK Continental Shelf),” said Managing Director of Oilex, Joe Salomon.
The Castletown discovery, situated in Block 113/27d under Licence P2076, where the company has already discovered gas in multiple reservoirs, has similarities to the producing Rhyl gas field, Oilex detailed.
The next step here, Salomon noted, is to begin preparation for a field development plan including appraisal/development drilling, with the completion of the acquisition subject to certain conditions precedent by 20 June 2020.
Outside of the UK, Oilex expects to report demonstrable milestones at the group’s Cooper Basin in early 2020, and in India, the group’s Cambay project is at the final stages with its JV partner ahead of an active drill programme planned in 2020.
“The Company continues to make solid progress on three fronts with the clear objective of building value for its investors by adding to the Company's opportunity set,” added Salomon.
Follow News & Updates from Oilex here: