Amalgamation Agreement

RNS Number : 4775J

Deo Petroleum PLC

30 June 2011

 



DEO Petroleum PLC

("DEO" or "the Company")

ANNOUNCEMENT OF AN AMALGAMATION AGREEMENT AND FIRM WELL COMMITMENT

The Perth Licence co-venturers in Block 15/21a, DEO Petroleum UK Limited, Faroe Petroleum UK Limited, Maersk Oil UK Limited and Atlantic Petroleum UK Limited (together the "Perth Group") are pleased to announce that they have reached commercial agreement with the Block 15/21g co-venturers, EnCore Oil plc,   Nautical Petroleum plc and Serica Energy (UK) Limited (together the "15/21g Group"), on the amalgamation of a sub area of 15/21a  with Block 15/21g  to create a single conjoined area (the "Amalgamated Area").

Under the terms of the agreement the parties, subject to the necessary DECC consent and the formulation of a detailed legal agreement, will have the following respective equities in the newly Amalgamated  Area:

Perth Group:
Deo Petroleum UK Limited	12.62%
Faroe Petroleum UK Limited	8.40%
Atlantic Petroleum UK Limited	3.24%
Maersk Oil UK Limited	5.74%
15 / 21g Group:
EnCore Oil plc	28.00%
Nautical Petroleum plc	21.00%
Serica Energy (UK) Limited	21.00%

The parties have also confirmed a firm well commitment to DECC on the Spaniards prospect to assess whether it is a continuation of the updip Gamma discovery which flowed at 2,660 bopd from the Upper Jurassic Galley sands. The Spaniards well is expected to be drilled in the  second half of 2012 and will satisfy the licence and fallow commitments.  The Spaniards well is to be funded 100% by the  15/21g Group on a dry hole basis.  It is agreed that the costs of any second well will be borne 42.8% by the Perth Group and 57.2% by the 15/21g Group again on a dry hole basis.

 David Marshall, DEO Chief Executive Officer Comments:

"We are pleased that the respective groups have been able to reach  agreement on the amalgamation of the equity as well as commiting  to the drilling of an appraisal well.  This offers the opportunity for the Perth Group to enhance the unappraised Gamma discovery into a meaningful commercial accumulation. Gamma/Spaniards is in close proximity to our Perth field where we are continuing to progress our plans for field development. This demonstrates an important step for DEO in becoming a leading, multi-asset exploitation  and production company in the Central North Sea".

30 June 2011

Enquiries:

DEO Petroleum plc

David Marshall, Chief Executive Officer                                                       + 44 (0) 1224 672 111

Heather Ruth, Communications Officer

Canaccord Genuity (Nominated Adviser and Joint Broker)

Charles Berkeley / Henry Fitzgerald-O'Connor                                             + 44 (0) 207 050 6500

FirstEnergy Capital LLP (Broker)

Hugh Sanderson / Derek Smith                                                                  + 44 (0) 20 7448 0200

College Hill

Simon Whitehead / Nick Elwes / Alexandra Roper                                        + 44 (0) 20 7457 2020

Notes to editors:

DEO Petroleum

DEO is an Aberdeen based company whose strategy is to invest in North Sea oil development and production projects with the potential to generate high value returns for shareholders.  DEO's ambition is to be a leading independent energy company within the UK Continental Shelf sector with a reputation for technical and commercial innovation and dynamic project delivery.  DEO has a highly experienced management team who will seek, within its asset portfolio, to design creative development solutions particularly where there are technical and/or other challenges, to execute the project delivery of that solution, and to operate throughout the development and production phase of the asset's life-cycle.

The area of the Perth Field, subject of a Field Development Plan to be submitted by the Perth Field Group in September 2011 is unaffected by this deal.

www.deo-petroleum.com

 

END

 

 

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