UKOG completes acquisition of UK oil and gas assets
The Board of UKOG (AIM: UKOG) is pleased to announce that it has today completed the acquisition of Northern Petroleum Plc's ("Northern Petroleum") UK production and exploration oil and gas licence interests for a total consideration of £1.5 million.
The licence interests acquired comprise: a 10% and 5% working interest in the producing Horndean and Avington Oilfields, respectively, in the Weald Basin, both of which are operated by IGas Energy Plc ("IGas"); a 50% interest in two further exploration licences in the Weald Basin; and a 65% interest in the offshore licence P1916 which flanks the western part of the Isle of Wight. In the year ended 31 December 2013, the average daily share of production amounted to approximately 20 barrels of oil.
As previously announced, the transaction was structured as the acquisition by UKOG of Northern Petroleum's three UK subsidiary companies, Northern Petroleum (GB) Limited ("NPGBL"), NP Solent Limited ("NPSL") and NP Weald Limited ("NPWL"), with an effective date of 23 July 2014 (the "Effective Date") with all revenue following this date accruing to UKOG. The average daily share of production since the Effective Date was approximately 19 barrels of oil per day. In aggregate the companies acquired from Northern Petroleum reported turnover and gross profit amounted to €591,000 and €345,000 respectively in the year ended 31 December 2013.
David Lenigas, the Company's Chairman, commented:
"Completion of the investment is another transformational step for UKOG, as it provides us with an interest in established production and revenues. In addition, there is the potential provided by two oil discoveries and significant exploration prospects within proven oil and gas plays."
The consideration paid in cash by the Company to Northern Petroleum amounted to £1.5 million, which has been funded from the Company's existing resources. The base consideration paid by the Company in cash for each of NPGBL, NPSL and NPWL, was £1,311,999, £1 and £188,000 respectively.
Competent Person's Statement
The information contained in this announcement has been reviewed and approved by Matt Cartwright, advisor to UK Oil & Gas Investments PLC, who has over 30 years of relevant experience in the upstream oil & gas industry. Mr. Cartwright is a UK Chartered Engineer and a member of the Society of Petroleum Engineers.