Paladin Acquires Stake Block 22/19a in UK North Sea
Paladin Resources' subsidiary, Paladin Expro Limited, has signed a Sale and Purchase Agreement with Elf Exploration UK (an affiliate of Total E&P UK plc), to acquire their 19.2366 per cent non-operated interest in License P.357 (Block 22/19a) in the UK Central North Sea.
The consideration is US$1.6 million in cash, subject to adjustments for working capital as at the effective date of January 1, 2005 and for cash flows in the period between the effective date and completion, which is expected to take place by the end of the second quarter of 2005. The acquisition is subject to partners' rights and approvals and to the consent of the UK regulatory authorities.
Block 22/19a contains the Fiddich gas and condensate discovery, which lies approximately 20 km to the south east of the Paladin-operated MonArb Fields. The Fiddich discovery well, 22/19a-1, which was drilled in 1984, encountered a 342 ft gas column in Triassic Skagerrak sandstones which tested at aggregate rates of 38.3 MMscf/d and 3,750 bbl/d of 42degrees API condensate. Subject to detailed engineering studies, Fiddich is a further potential development project within Paladin's core area in the North Sea, offering significant potential synergy with its existing operated business.
The Company is also at an advanced stage in negotiations with Nippon Oil Exploration and Production U.K. Limited ('NOEPUK') to acquire additional interests in the License to raise its ownership to 52 per cent and to secure operatorship. Following completion of these transactions, partner interests in the License would be Paladin Expro Limited (operator) 52 per cent, NOEPUK 38 per cent and Noble Energy (Europe) Ltd 10 per cent.
Roy Franklin, Chief Executive of Paladin, commented:
'Fiddich is an attractive gas condensate discovery with a number of alternative
development options, including subsea tieback to either the Paladin-operated
Montrose platform or to other infrastructure hubs. The acquisition of this
interest in Block 22/19a further consolidates our acreage position in our core
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