Grove Sells Majority of UK North Sea Licenses
Grove Energy Limited, the oil and gas exploration company with assets in Europe and the Mediterranean Margin, is pleased to announce that it has sold a majority of its UK North Sea portfolio to EnCore Oil plc, while keeping a direct 10% interest in Block 42/13 and surrounding acreage. Grove will receive 9.9 million shares of EnCore and the other Virgo participants are to receive 27.1 million EnCore shares. This transaction has resulted from the previously announced Virgo Oil & Gas plc consolidation strategy.
Grove has retained a 10% interest in Block 42/13 and surrounding acreage located in the north western part of the UK Southern Gas Basin. The 42/13 structure was mapped from 3D seismic data as a structural trap that was targeted by well 42/13-2 drilled in 1997 by Mobil. Well 42/13-2 encountered a 140 meter gross gas column and studies to date indicate the potential for significant reserves in a very large structure.
The sale includes Grove's 30% interest in Blocks 21/22 and 21/28b in the Northern North Sea and 15% interests in Blocks 42/13 and 42/12, 42/14, 42/8 and 42/9 in the Southern North Sea.
EnCore was established in April 2005 to focus on oil and gas exploration within the UK and listed on AIM in March 2006 with its takeover of Oil Quest Resources plc and concurrent (pnds stlg)16.6 million fund raising. Encore is actively traded on AIM and upon closing will have approximately 241 million shares on issue and a market capitalization of approximately (pnds stlg)60 million.
The EnCore transaction accomplishes the strategy of Virgo Oil and Gas plc, a company formed by Grove, Virgo Energy Limited and Nido Petroleum Limited to consolidate their North Sea interests and achieve critical mass and a balanced portfolio.
Glenn Whiddon, CEO of Grove, stated, "For Grove shareholders this transaction accomplishes several important objectives - we consolidate our North Sea portfolio to reduce its risk profile; we convert our property interests into EnCore shares with its diversified exploration portfolio, significant upside potential, strong balance sheet and excellent management; and we retain a 10 percent interest in the highly prospective Block 42/13 and surrounding acreage."
Completion of the sale is expected to occur before the end of 2006 after certain regulatory approvals, including approval of the transfers by the DTI.
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