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UK: Hibiscus Petroleum completes acquisition of the Crown discovery in the North Sea

13 Dec 2019

Photo - see caption

Hibiscus Petroleum has announced that, pursuant to the earlier disclosures made on 17 July 2019 and 7 October 2019, its indirect wholly-owned subsidiary, Anasuria Hibiscus UK ('AHUK'), has completed the acquisition of North Sea Blocks 15/18d and 15/19b ('License P2366'), from United Oil & Gas and Swift Exploration for a total cash consideration of up to USD5 million.

Completion of the acquisition occurred pursuant to the receipt of approval from the United Kingdom’s Oil and Gas Authority ('OGA') for the assignment of License P2366 to AHUK from the Sellers and the appointment of AHUK as Exploration Operator on 4 December 2019. In accordance with the terms of the conditional Sale & Purchase Agreement executed on 7 October 2019 ('SPA'), a further USD0.9 million has been paid upon achieving completion of the acquisition.

The Blocks are located offshore in the United Kingdom sector of the North Sea, approx. 250 km northeast of Aberdeen. The Blocks include the Crown Discovery which consists of 2C contingent resources that range between 4 to 8 million barrels of oil, subject to an independent 3rd party expert assessment. The Blocks are located 12 km south-east of Marigold field, which together with the Sunflower field, was acquired by AHUK in October 2018.

United and Swift were awarded License P2366 as part of the OGA’s 30th Licencing Round, in August 2018, and they each hold 95% and 5% participating interest respectively.

AHUK holds 50% operated interest in Licence P198 Blocks 15/13a and 15/13b containing the Marigold and Sunflower oilfields respectively, in addition to 50% joint-operating interests in the P013 licence consisting of the Teal, Teal South and Guillemot A fields, as well as 19.3% non-operating interest in the P185 licence consisting of the Cook field. The Teal, Teal South, Guillemot A and Cook fields which produce oil and gas to the Anasuria Floating Production Storage and Offloading facility are collectively known as the Anasuria Cluster. The Anasuria Cluster is located offshore in the United Kingdom sector of North Sea.

Subject to further milestones being achieved post SPA completion, an additional sum of USD3 million will be paid within 7 business days of the actual date of approval of the Marigold Field Development Plan ('FDP') which includes the development of the Crown discovery as part of the overall Marigold development ('FDP Approval'), by the relevant United Kingdom regulatory authority, which is expected to be received by the end of 2020. However if FDP Approval is not achieved, or if the Marigold FDP submitted does not include the development of the Crown discovery, AHUK may, at its discretion, proceed with the USD3 million payment or transfer License P2366 back to the Sellers at nominal consideration without any further payment obligation. In addition, up to USD1 million will be paid through an overriding royalty scheme once the Crown discovery has commenced production.

Given its proximity to Marigold, the contemplated development of Crown is based on a single well subsea tieback to the Marigold field.

Photo - see caption
P2366 licence location and neighbouring fields (Source: United Oil & Gas)

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Source: Hibiscus Petroleum

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