Transco and Bridge North Sea Combine Forces
Transco Resources and Bridge North Sea Limited have entered into a binding letter of intent to combine the businesses of Transco and Bridge by means of the acquisition of all the outstanding shares of Bridge. The Proposed Acquisition is at arm's length. As part of the transaction Transco will change its name to Bridge Resources Corp.
Resource and Prospect Report
A report was prepared by DeGolyer and MacNaughton Canada Limited (D&M), effective May 31, 2006, estimating the prospective resources of the four prospects in the 100% owned North Sea Blocks. The report on the initial prospect on the blocks generated a range of estimated-unrisked gross prospective gas resources from 236 BCF to 645 BCF, with the best estimate of 420 BCF of recoverable gas. The report further estimated a geologic risk adjusted gross prospective gas resource of 86 BCF of gas for the prospects. The D&M North Sea report has been prepared in accordance with National Instrument 51-101 as it pertains to the evaluation of prospects and resource. The company filed the D&M North Sea report on SEDAR and encourages readers to review the report in its entirety for additional information. The report is subject to a number of qualifications and assumptions, and discloses no reserves of any nature. Prospective resources are those quantities of oil and gas estimated on a given date to be potentially recoverable from undiscovered accumulations. If discovered, they would be technically and economically viable to recover, there is no certainty that the prospective resource will be discovered. If discovered, there is no certainty that any discovery will be technically or economically viable to produce.
Bridge holds a 100% interest in the four offshore exploration blocks located in water depths of 15 to 50m in the Southern UK North Sea. In aggregate, these exploration blocks cover 900 square kilometers.
Bridge was awarded two licenses comprising the four blocks in the UK 23rd Bid Round effective December 22, 2005. All four blocks have work commitment requirements. Since the award of the blocks, Bridge has completed all work requirements to date. These include the purchase of 920 km2 3D, which in excess of the 600 km2 commitment, and the purchase of over 2,000 km 2D seismic. Final seismic reprocessing is currently underway to optimize drilling locations on both licenses. The UK Department of Trade and Industry require a commitment to drill one well on each of the two licenses prior to December 22, 2007 with the further requirement that one additional well on each license be drilled by December 22, 2009.
The primary reservoir targets on all four blocks are Carboniferous sandstones that produce in several UK North Sea fields and the Permian Rotliegendes Aeolian sands and overlying Zechstein dolomites. It is expected that drilling will commence in early 2007 with the initial well having an estimated gross cost of $US10,000,000. The first well in the drilling program is expected to be drilled to a total depth of 9,500 feet with an estimated drilling time of 30 days. This target zone is closely analogous to the 73 BCF Saltfleetby Field, which 30 km west of the target. In the D & M report this target was shown with a probability of geological success of 14%. After the completion of this initial well it is expected that the drilling of other wells in the drilling commitment will commence as soon as possible. The drilling of all wells is subject to certain conditions which include but are not limited to drilling plan approvals and rig availability; at this time Bridge does not have a rig under contract to drill these wells. The management team of Bridge has had extensive experience in the North Sea, both Mr. Davies, President of Bridge, and Mr. Stewart, VP Exploration of Bridge, have been involved in international exploration and development projects in the North Sea as well as other areas.
Transco will require additional financing of approximately $6,000,000 to complete the drilling of the initial well and will require additional financing in order to meet its obligations related to the future work commitments it has in relation to the licenses it currently holds. This additional financing will come in the form of additional equity or debt financing. A further announcement regarding the details of the financing will be made in due course.
Canaccord Capital Corporation, subject to completion of satisfactory due diligence, has agreed to act as sponsor to Transco in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.
UK 24th North Sea Bid Round
Transco and Bridge jointly bid on an additional 14 blocks in the southern region of the UK North Sea. The 24th Round blocks would be complementary to the program which has been developed from the blocks which were awarded in the last bid round, and which were evaluated in the above noted report from Degolyer & MacNaughton. The companies are expecting to have the result of the bids announced by the UK Department of Trade and Industry in mid September.
Resumption of Trading
It is expected that the shares of Transco resume trading on July 18, 2006.
- Transco Resources Completes Acquisition of Bridge North Sea Ltd (Sep 14)
- Transco and Bridge North Sea Combine Forces (Jul 17)
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