Lochard No Longer Qualifies as Thunderball Operator

UK junior explorer/producer Lochard Energy announced Monday that it no longer qualifies as operator of UK Licence P1611, which included the Thunderball natural gas discovery, because of funding problems.

Lochard said that despite "considerable efforts" to bring in a partner over a prolonged period it has not been able to find a third party who would be prepared to meet the cost of drilling in the time available. The firm added that discussions are currently underway with the UK's Department of Energy and Climate Change to determine the future of License P1611 but it expects the license to lapse.

Lochard's management plans to simplify the company's asset portfolio – as well as embark on cost savings – in order to make the firm attractive to larger businesses for a potential merger or takeover.

The company had previously announced a farm-in by Strike Oil into 40 percent of license P1861, while is also working on a deal with another North Sea operator for that firm to become operator on the Lochard's 9/17b, 22b, 14/17, 3/5 and 10c blocks.

Lochard Chairman Clive Carver commented in a statement:

"These events mark the final stages in the clearing up of Lochard's legacy issues. We expect the business will shortly consist of a single producing asset and carried interest in the near term on some potentially exciting new licences.

"On completion of these changes, we anticipate the path to finding a suitable merger partner under the ongoing 'Formal Sale Process' will become easier and more rewarding for Lochard shareholders."

Lochard also announced Monday that at the end of December production from the North Sea Athena field increased to almost 11,000 barrels of oil per day gross, with 1,100 bopd net going to the company.