Andalas pleased as Eagle Gas gets extension at Badger prospect
Updated : 09:12
Andalas Energy and Power updated the market on its investment in Eagle Gas on Monday, reporting that the Oil and Gas Authority had agreed a five-month extension of the initial term of licence P2112, to 19 May 2019.
The AIM-traded company said that under the terms of the extension, the licence holder must, by no later than 31 March next year, advise the authority that it had either elected to drill one well to 3800m or 100m into the Namurian, whichever was the shallower, and approved the necessary funding for the well commitment, or elected to terminate the licence.
It would also need to provide the results of two geological and geophysical studies to the Oil and Gas Authority by 1 March next year, together with a conclusion as to whether the results of those studies supported a drill decision.
An update would need to be provided to the OGA by 1 March on all pre-drill decision work.
Andalas said the operator would also undertake an additional technical assessment of the Ketch gas prospect, after a third-party review concluded that there could be additional gas potential in the Ketch.
It said that identification of additional gas potential in the Ketch might inform the licence holders’ decision on the “optimal location” of an exploration well on the licence.
Eagle Gas had the funds available to complete the additional work programme, the Andalas board confirmed.
“We are pleased that the Badger licence has been extended,” said Andalas Energy chief executive officer Simon Gorringe.
“It enables the operator, Holywell Resources, and Atlantic Petroleum UK to complete further work and optimise the technical and commercial appraisal and development plans.”
Andalas is the owner of a 25% interest in Eagle Gas , which itself is the 100% owner of Holywell Resources, which owns a 66.67% interest in licence P2112/
Atlantic Petroleum UK owns a 33.33% interest in the licence.
The licence contained the Badger prospect, which Andalas said contained a “significant resource”.