- UK government provides fiscal clarity with budget announcement on 30 October
- Anning and Somerville project restart underway with updated export route options under consideration
- Project update meeting with NSTA scheduled for 5 December
- Joint Venture partner meetings to be held mid December
- UK NBP gas prices (~120p/therm)(1) and futures continue to strengthen
Hartshead Resources (HHR) has provided the following operational update following the UK Government budget announcement on 30 October 2024. The revised oil and gas fiscal regime, outlined in the UK Government budget, has provided the necessary information for the evaluation of the Anning and Somerville gas fields development project under these new terms. Additionally, HHR has undertaken the evaluation of an alternative export route to determine if it provides a superior development project.
During the 2023/2024 period Hartshead has reviewed multiple development options for the Anning and Somerville fields, with a view to providing an optimised, economically robust development, both in terms of value for the stakeholders and application of the Central Obligations for the North Sea Transition Authority (NSTA). Part of the recent work undertaken involved a reassessment of the gas export route including an option that had previously been unavailable. Recent changes in asset ownership and operatorship have seen this alternate route become available to transport the Anning and Somerville gas to market.
Technical work has continued on the subsurface model with the interpretation of the re-processed seismic, not limited to Anning and Somerville, but including the exploration opportunities located within licence P2607, covered by the re-processed seismic volume. Such opportunities, if successfully appraised and developed would provide significant secondary economic value to the Anning and Somerville development.
Hartshead plans to update the NSTA on the status of the Anning and Somerville development project in early December as a precursor to submitting the necessary documentation, including a revised Field Development Plan to allow the project to progress to the execution phase. The Company continues to work on an updated schedule to optimise project timelines and enable the resumption of key development activities, ensuring the project aligns with current market opportunities and delivers maximum value for all stakeholders.
Gas Price
Despite the European Commission announcing that gas storage levels were at 95% on 31/10/2024, NBP spot gas price has continued to increase through the Autumn reaching 120p/therm in late November. This confirms that strong gas demand through the summer months is forecast by the market to extend into the winter season.
Chris Lewis, Hartshead CEO, commented: 'The UK Government's recent budget announcement has provided the clarity that our industry has needed and been calling for since February this year. We are now in a position to advance the Anning and Somerville gas fields development, which remains a robust and high value project under these new fiscal terms. We are currently updating our project schedule and will propose this to the Joint Venture at our December meetings.'
(1) ICE UK Natural Gas Continuous Contract
Source: Hartshead Resources
