Ansila Energy NL (ASX:ANA) (OTCMKTS:PGNYF) has reached an agreement to acquire the remaining 78.4% interest in Hartshead Resources Limited (HRL) that it doesn’t already own, with the aim of creating a new UK North Sea gas developer.
Following the completion of the deal HRL will become a wholly-owned subsidiary of Ansila.
The UK 32nd offshore licensing round award will see HRL awarded five contiguous blocks in the Southern North Sea with four existing discoveries totalling 354 billion cubic feet of 2C contingent resources.
UK Oil and Gas Authority (OGA) has provided HRL a provisional start date of December 1, 2020, with the initial term of the licence of five years, followed by a second term of two years and third term (intended for production) of 18 years.
The company plans a multi-phased development of existing gas discoveries including:
- Phase I – Victoria and Viking Wx fields with 217 billion cubic feet oil of audited 2C contingent resources; and
- Phase II – Audrey NW and Tethys North fields with 139 billion cubic feet of 2C contingent resources.
In addition, the Phase III exploration portfolio includes 141 bcf of 2U prospective resources in two drill-ready exploration prospects (Vixen SW and Vixen SE).
The field development plan (FDP) submission and front end engineering and design (FEED) for Phase I is targeted by April 2022, with work on the Phase II projects continuing in parallel and targeting of the preliminary FDP/FEED for Audrey NW and Tethys North in quarter four 2020.
A full review of the licensed acreage and adjacent region will be completed during the first three years and prior to any partial relinquishment to ensure that additional low-risk exploration opportunities are captured and aggregated within the Phase III exploration portfolio so that potential further field development plans can be generated post-2024.
Multi‐phased development areas within Hartshead Licensed acreage
Simultaneously with the completion of the acquisition, the company will also conduct a placement to raise A$7 million via the placement of 280 million shares to professional and sophisticated investors at an issue price of A$0.025 per share.
CPS Capital Group Pty is lead manager and broker.
Phase I funding
The placement is expected to fully fund work commitments for Phase I operations of the multi-phase portfolio of existing gas fields through to the preliminary FDP/FEED.
Ansila believes there is an opportunity to create material value as Phase I, II and III work programs are taken through an independent CPR audit and FDP/FEED to final FDP approval with the latter being the most value accretive with the conversion of 2C contingent resources to 2P reserves.
The consideration for the acquisition will be 1 billion fully paid ordinary ANA shares issued to shareholders of Hartshead who include existing directors Christopher Lewis and his related parties (totalling 17.7% of HRL) and Dr Andrew Matharu (holding 9.1% of HRL) together with other shareholders unrelated to the company.
All consideration shares will be subject to voluntary escrow for a period of 12 months from completion with Lewis and Matharu subject to escrow restrictions imposed by the ASX.
Completion is subject to conditions including shareholder and regulatory approvals, due diligence, an independent experts report concluding the acquisition is fair and reasonable, completion of the placement and HRL being formally awarded the HRL licence by the UK OGA.
Experienced management team
Upon completion, existing directors will be appointed to management roles with Lewis to become chief executive officer and Matharu to be appointed chief financial officer.
The management team combined will be highly experienced with extensive industry experience across subsurface through engineering, commercial, HSEQ and capital markets for oil and gas upstream projects and UK Southern Gas Basin specific knowledge.
In addition, the company has advised that Matthew Foy has been appointed company secretary after the resignation of Ben Secrett.
Foy is a professional company secretary with over 14 years’ experience facilitating public company compliance with a core focus on the ASX Listing Rules, operational and governance disciplines.