Stratic's share of the purchase price in respect of the 13.42% interest to be acquired is US $0.6 million. In addition, Stratic will assume liability for its share of contingent payments due under Tuscan's original purchase agreement. The first of these payments is due upon approval of a Field Development Plan ("FDP") by the Secretary of State and subsequent payments fall due upon reaching certain production levels in the field. The maximum amount payable by Stratic under these arrangements is US$4.8 million.
Commenting on the acquisition, Kevin Watts, President and Chief Executive of Stratic Energy said "we are delighted to participate in this acquisition, which resolves a number of partnership issues and increases our stake in the Crawford field to a meaningful level. We look forward to working with our partners to assess the development potential of this previously abandoned field. This acquisition marks the first step in Stratic's plans to expand its North Sea portfolio".
Crawford, which has been known recently as Cragganmore, was discovered by well 9/28-2 drilled by Hamilton Brothers in 1975 and was subsequently appraised and developed in the late 1980s, producing approximately 4 million barrels of 30-35 degree API oil via a floating production vessel in the period 1989 to 1990. Field performance fell below expectation and the field was abandoned in the low oil price environment that existed in 1990.
Fairfield is carrying out work on the subsurface on behalf of the joint venture. Using a modern re-processed 3D seismic study, Fairfield estimates that the initial oil in place volume is approximately 190 million barrels for the field, of which approximately 140 million barrels (representing the largest target volume for development) are contained within the northern and eastern area of the field. Additional appraisal potential is expected in the untested horizons.
Current plans, which are at an early stage, assume that the field will be developed in phases using modern drilling and completion techniques to reduce risk with wells tied back to one of two nearby production facilities.
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