United Oil and Gas (UOG) says it is “eager to advance” a host of central North Sea assets after a deal to sell them failed.
A binding sale and purchase agreement (SPA) was reached with Quattro Energy Limited in September to sell its licenses PP2480 and P2519 – the latter including the Maria discovery.
Completion of the deal was dependent on industry regulator approval and Quattro completing a fundraising process.
But after the North Sea newcomer failed to raise the necessary cash, despite the postponement of deadlines, UOG (LON: UOG) chose to end the sale in March.
In its annual results for 2021, the company now says it plans to seek “commercialization opportunities and potential partnerships” for the assets.
Rising commodity prices and the proximity of licenses to existing infrastructure make them “attractive investment” openings.
Oil and gas are back in favor for now as governments try to bolster domestic supply in light of Russia’s invasion of Ukraine.
Soaring energy bills and inflationary fears also mean talk of increasing production in the North Sea is back on the agenda.
UOG said: “During the first half of 2021, progress was made on the work programs associated with the licenses: new 3D seismic data was purchased and interpreted, with initial mapping providing positive indications of existing discoveries. of Maria, Brochel and Maol, and on identified prospectivity, including Zeta, Dunvegan and deeper Jurassic targets.
“In September 2021, the company announced that it had entered into a binding sale and purchase agreement (SPA) with Quattro Energy Limited (Quattro) to sell its UK licenses in the Central North Sea. Completion of the sale was conditional on receipt of approval from the Oil and Gas Authority (OGA) and completion of a fundraising process by Quattro. OGA approval has been received, however, Quattro has not completed the fundraising process at the long shutdown date (February 28, 2022). In March 2022, United ended the SPA with Quattro and retained the licenses as part of the company’s portfolio.
“Both licenses are located in a very promising area of the CNS, where important development activities are taking place. They are located close to existing infrastructure as well as the Marigold and Yeoman discoveries and the major Piper, MacCulloch and Claymore oil fields.
“There are low-cost commitments on both licenses, and with rising commodity prices and renewed activity in the neighboring region, United believe they each contain attractive investment opportunities. United are looking forward to advance commercialization opportunities and potential partnerships that the assets offer.
Quattro was formed in April 2021 by North Sea stalwart Neill Carson, founder of Ithaca Energy and i3 Energy.
Speaking to Energy Voice after the UOG deal fell through, Mr Carson said the outcome was “unfortunate”.
UOG obtained license P2480 during the 31st licensing round in August 2019 and license P2519 during the 32nd licensing round in December 2020.
It holds a 100% interest in each of them.
The P2519 license includes the existing Maria discovery, drilled by Shell in 1976, which the UOG estimates to contain approximately 6 million barrels of oil equivalent (boe) in mid-term recoverable resources.
It also contains two Jurassic finds, Brochel and Maol. Maol was drilled by Shell in 1987 and in tests sank over 2000 boepd.
The P2480 license includes the Zeta prospect, which is estimated to contain an average safe in-place volume of 90 million barrels.
UOG, established in 2015, is an oil and gas exploration, development and production company with assets in Egypt, the UK, Italy and Jamaica.