Granby Takes Stake in Kerloch Discovery

Granby Oil and Gas has executed a Farm-In Agreement to participate with a 10% interest in UK North Sea License P.201 Block 211/22a NW, which contains the Kerloch oil discovery.

The field was discovered in 1976 by well 211/22-1. The new appraisal well which commenced drilling on November 21st into an adjacent fault block is expected to take 30 days to drill.

Under the agreed terms, to earn a 10% participating interest from First Oil Expro Limited, Granby will fund 15% of the costs of drilling and testing the well up to a 100% gross expenditure capped at £14 million. For expenditure above the £14 million cap, Granby will contribute costs in accordance with its 10% participating interest.

The assignment of interests is subject to approval of the Secretary of State for the Department of Business, Enterprise and Regulatory Reform (DBERR) to the assignment of License interests to Granby.

David Grassick, Managing Director of Granby Oil and Gas, said: 'We are pleased to participate in the appraisal of the Kerloch discovery, which is in line with our strategy to acquire other appraisal and development opportunities in the North Sea and other areas of interest.'

Bob Moore, Commercial Director of Granby Oil & Gas, said:

'Following the sale of Galoc, Granby is now able to recycle some of the funds into other appraisal and development projects such as Kerloch and Monkwell.'