Upstream exploration and production company, Moorland Energy, has secured a further £7million investment from the specialist investor in oil & gas services, Epi-V. This follows the recent announcement that significant gas reserves were confirmed at its Ebberston South well in North Yorkshire.
The deal will enable the business to fund the design, planning and engineering developments required to optimise gas production at the site and to prepare the well for future connection to the UK transmission system.
Moorland Energy is a vehicle created to acquire licenses to extract hydrocarbons from surveyed and partially delineated discoveries.
Epi-V invested £10million in the business in November 2008 to finance appraisal drilling, well testing and reserve verification activities on two exploration licenses which it had acquired from Warwick Energy.
This funding enabled Moorland Energy to achieve its first strike at the 3D seismic defined extension to the Wykeham gas field at Ebberston South.
Economic viability of future gas production was confirmed in independent tests which proved that the well boasts very low water content and high flow rates.
Epi-V's second investment in Moorland will also be used to undertake further exploration work on the company's PEDL 120 license at the Wykeham gas field.
In order to fully capitalise on the opportunities created by the gas discovery, Epi-V has worked with management to strengthen the team by appointing a new CEO, Chief Engineer and non-executive Chairman.
Former non-executive director of Moorland Energy Lawrie Erasmus has been appointed chief executive. Lawrie has a broad base of experience in both the corporate finance and oil and gas sectors, previously heading up Viking Petroleum Group and founding Cato UK Limited, a management consulting and corporate finance advisory firm.
Fergus Jenkins has been appointed Chief Engineer to lead the technical aspects of the next phase in the business’ development. Fergus has over two decades of experience which spans reservoir senior technical and managerial roles at major wells across the globe.
Non-executive Chairman Norrie Stanley is a qualified Chemical Engineer with over 35 years of experience in the oil and gas sector. His most recent roles as the Head of Gas International at BP as well Senior Vice President Commercial for Exploration and Production and for Gas, Power and Renewables.
Lawrie Erasmus, chief executive of Moorland Energy, said: “Data indicates that the Ebberston South site contains significant quantities of gas, so the cash flow generated by this strike will enable the business to progressively target other development, appraisal and ultimately exploration opportunities.
"We're currently examining a number of licenses for accessible reserves across the UK which are promising but undervalued.
"In Epi-V we have a backer that is providing not only the financial muscle but also the industry guidance and engineering input which is playing a crucial role in the development of the business."
John Hutchinson, partner at Epi-V and non-executive director of Moorland Energy, said, "Moorland's strategy is to develop low risk appraisal prospects such as Wykeham to ensure that, at completion, we can provide a valuable asset with a strong cash flow base to potential acquirers.
"Domestic hydrocarbon reserves will become increasingly important in meeting Europe's energy requirements so exploration and production of undervalued assets will generate significant future value.
"With a forward-thinking management team and the funding and hands-on input from Epi-V, Moorland is well placed to become a significant player in the oil and gas exploration and production industry."