AIM-listed UK Oil & Gas (UKOG) has appointed UK based oil and gas divestment and project marketing specialists Envoi to facilitate the farmout of up to a 50% working interest in the Company's material 100% owned Loxley gas and hydrogen feedstock project. The farmout seeks to fully fund the planned Loxley-1 appraisal drilling and testing programme with the Company's share of costs being carried by the farminee or farminees. The project has incontestable planning consent to proceed ahead (see RNS 10th January 2024).
Separately from Envoi's mandate, active discussions are ongoing with two UK listed energy companies interested in pursuing the farmout opportunity.
Loxley, one of the UK onshore's largest historic gas discoveries, was assessed in its most recent February 2023 Competent Persons Report ('CPR') to contain mid-case recoverable 2C Contingent Resources of 31.0 billion cubic feet net to UKOG, with an associated net to UKOG post-tax present values (discounted at 10%) of £124 million using 31 December 2022 gas prices and £87 million using an RPS Energy forward price forecast (see RNS 21st February 2023). Further development of the asset post appraisal would be required to move the 2C classification to Reserves (see glossary definitions).
The CPR is available on the Company's website, Click here.
Stephen Sanderson UKOG's Chief Executive commented:
'The farmout process is designed to fully fund the Loxley appraisal programme and, if successful, remove the requirement for the Company to raise additional funds for its share of costs for this material project. We look forward to working with Envoi and with prospective farminees'.
Source: UKOG
