Valiant has signed a Conditional Letter Agreement ("CLA") to acquire Antrim Causeway (N.I.) Limited, a wholly owned subsidiary of Antrim Resources (NI) Limited, a subsidiary of Antrim Energy Inc, whose main asset is a 30.0% working interest in License P.201, Block 211/22a SE and License P.1383, Block 211/23d containing the Causeway field. Along with its interest in the Causeway Field, Valiant anticipates acquiring up to £37 million of potential UK tax losses held in Antrim Causeway (N.I.) Limited associated with historic capital spend to the 30.0% working interest.
Completion of the acquisition is subject to various conditions precedent and regulatory consents, including full sanction of the Field Development Plan ("FDP") by the field partners and the Department of Energy and Climate Change ("DECC"). Following completion of the transaction, Valiant will hold a 54.50% stake in the Causeway Field.
In the event that development sanction for the Causeway Field is received, Valiant has agreed that it will repay a US $21.75 million loan note issued by Antrim Causeway (N.I.) Limited in favor of Antrim, to meet the development costs accruing to Antrim's remaining interest in the field. Under the terms of the CLA, Antrim has also agreed to transfer Operatorship of the field to Valiant, subject to formal DECC and partner consent under the Joint Operating Agreements governing the field.
It is Valiant's intention to continue to progress the work done to date by Antrim and finalise a revised FDP for submission to DECC during 2010 in order to begin pursuing the first phase of the Causeway development to access oil volumes from the East Causeway area. Further development updates will be provided in due course.
Peter Buchanan, Valiant's CEO, commented, "The acquisition of Antrim Causeway (N.I.) Limited and assumption of Operatorship represents an exciting opportunity for Valiant to expedite the Causeway project. The recent reduction in rig and service costs and introduction of the Small Fields Allowance in the most recent UK budget are anticipated to make the Causeway field an attractive near term project for the Company. We would like to thank Antrim for its hard work to date and look forward to continuing to work with them and our other field partner to ensure the timely delivery of this development in our core Northern North Sea area."
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