Granby Acquires Stake in UK Gas Development
Granby Oil and Gas plc, which has interests in the UK North Sea and the Philippines, said that it has reached an agreement with ExxonMobil affiliates to acquire a 50% interest in block 49/29b in the UK Southern North Sea containing the Tristan North West gas development. The deal is subject to acceptance of the license assignment by the UK Department of Trade and Industry (DTI).
The Tristan North West accumulation contains proven gas, which was discovered in 1987 by the 49/29b-5 exploration well. Tristan North West lies next to the previously produced Tristan field. Granby's board believes that the accumulation represents an economically attractive opportunity that is expected to produce in excess of 30bcf, with first gas potentially as early as Autumn 2007 and an economic field life of approximately 5 years.
Mosaic Natural Resources Limited will acquire the remaining 50% interest in the same block, having originally signed a sale and purchase agreement (SPA) with ExxonMobil affiliates in 2005 for the entire block. Granby, together with Mosaic, expects to complete the SPA with ExxonMobil affiliates during August 2006 subject to DTI approval.
Granby has provided technical and commercial assistance to Mosaic, including the introduction of a financial partner. Terms have been agreed under which the partner will fund the majority of the cost of the Tristan North West development, which is expected to cost approximately $80m, while the partner will acquire at a later date from Granby and Mosaic, a 30% equity interest in the project. The finance is subject to final approval by the partner Board, which is expected to be received at the end of August. Granby and Mosaic will each retain a 35% interest in the project.
"Our agreement with Mosaic is an important step towards completing the financing of the Tristan North West development, which will become our second development project, and which has the potential to create significant value for Granby," said David Grassick, Granby's managing director. "Granby also has a good portfolio of high-quality exploration prospects in the North Sea, and we are making good progress on financing our drilling program through farm outs."
"Mosaic is delighted to be working with Granby to bring Tristan North West, our first North Sea project, to fruition," added Bruce Appelbaum, Mosaic's chairman. "Granby's subsurface and commercial expertise complements our skills and experience."
Granby Oil and Gas plc is an oil and gas business focused on exploration in
carefully selected areas in the North Sea and elsewhere, and also on securing production and
development. The group's strategy is to build a significant portfolio of assets through both
discovery and exploitation of oil and gas reserves.
Operates 16 Offshore Rigs
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