The consideration comprises a cash payment of £575,000 upon completion plus additional payments of (1) £575,000 when first commercial production is achieved from the development of the Christian discovery and (2) £125,000 when first commercial production is achieved from the development of the Bligh discovery.
The Christian discovery lies 7km to the east of the producing Venture operated Mallard field and was discovered in 1990 by well 21/20b-4st2. A successful drill stem test ("DST") was carried out at the time and a production rate of 6,364 barrels of oil per day ("bopd") achieved. Venture estimates that gross recoverable P50 recoverable reserves are 7.1 million barrels of oil equivalent ("MMboe") and that a subsea tie-back to the existing Mallard sub-sea facilities is a feasible development option. Initial gross production rates following successful development are estimated by Venture to be 4,000 to 5,000 bopd. The discovery is currently on the DTI Fallow Discoveries register and, upon legal completion of this acquisition, it is Venture's expectation that the optimal approach to bringing the reserves into production will be developed in conjunction with the operator of Block 21/20b. The Christian accumulation is believed by Venture to straddle both Blocks 21/20a and 21/20b.
The Bligh gas condensate discovery lies to the south east of Christian in Block 21/20b and was discovered in 1995 by the 21/20a-5 well. A DST flowed 2,750 bopd of 45.6º API condensate and 15.4 million standard cubic feet of gas per day ("MMscfpd"). Venture estimates that gross P50 recoverable reserves from either a one or two well development are 10.8 MMboe and that a subsea tie-back to nearby infrastructure is the most likely development solution.
Upon legal completion of both this acquisition and the recently announced acquisition of Amerada Hess' 28.46% interest in Block 21/20a, Venture will hold an approximate interest of 45.7% in the Christian discovery (assuming a 50:50 split of the accumulation between Blocks 21/20a and 21/20b). It will also hold a 41.3% interest in the Bligh discovery, which is assumed to lie wholly in Block 21/20a.
Legal completion remains subject to regulatory and customary DTI and partner approvals.
Commenting on the news, Mike Wagstaff, Chief Executive said:
"These undeveloped discoveries lie very close to the Venture-operated Greater Kittiwake Area production hub and, as such, we have been evaluating them for some time. We now look forward to working with our prospective partners in both new blocks to firm up the best development solutions for both Christian and Bligh. Given our access to drilling rigs and subsea construction vessels, we will be looking to move forward to develop these 'stranded' discoveries in short order. We are delighted to be able to add to our development inventory in this way and also to generate opportunities to further expand Kittiwake, our newest production hub."
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