The consideration is US$10 million in cash, subject to adjustments for working capital as at the effective date of July 1, 2003 and for cash flows in the period between the effective date and completion, which is expected to take place by the end of the first quarter of 2004. The consideration will be satisfied from existing bank facilities.
Under the agreement, Paladin will acquire the following interests:
A 30.4893 percent interest in Block 30/3a (Upper) (above the top of the Cretaceous Danian/Ekofisk Layer), which lies adjacent to the UK/Norwegian median line. This block contains the greater part of the Blane Field, a 1989 oil discovery in Palaeocene Forties sandstones which extends from UK Block 30/3a into Norwegian Block N1/2. The Company's wholly-owned Norwegian subsidiary holds a 65 percent interest in, and is the operator of, Block N1/2.
A 30 percent interest in Block 16/13a, which lies immediately to the south-east of the Brae and Miller Fields adjacent to the UK/Norwegian median line. This block contains the Enoch and J1 hydrocarbon discoveries. Enoch is a 1985 oil and gas discovery in Palaeocene sandstones, and J1 is a 1984 gas condensate discovery in Middle Jurassic sandstones.
A 41.08 percent interest in Block 22/16a, which lies immediately to the west of Paladin's Montrose and Arbroath Fields.
The acquisition and transfer of operatorship to Paladin are subject to partners' rights and approvals, and to the consent of the UK regulatory authorities.
Roy Franklin, Chief Executive of Paladin Resources plc, commented: 'Blane is an attractive light oil discovery in a good quality Palaeocene reservoir with a number of alternative development options, including subsea tieback to either existing UK or Norwegian infrastructure. Without its median line issues this is a discovery that, in all likelihood, would already have been developed. The planned new Framework Treaty for cross-border activity, combined with our involvement on both sides of the median line, presents the Company with an attractive development opportunity.
Enoch has similar appeal as a potential satellite development, while acquisition of an interest in Block 22/16a consolidates our acreage position around the Montrose and Arbroath Fields.'
Most Popular Articles