Oilex Eyes UK Offshore Foray
Australia’s Oilex has entered into talks with the UK’s Koru Energy to take a 50% stake in the Knox, Lowry and Whitbeck gas discoveries in the East Irish Sea.
The Sydney-listed producer said in a September 16 statement it had signed an exclusivity agreement on the purchase, which would mark its foray on to the UK’s continental shelf.
Knox, Lowry and Whitbeck are shallow-water fields located in close proximity to a subsea tie-back pipeline that pumps gas to Spirit Energy’s nearby North Morecambe gas production platform and terminal, which was recently modernised. Knox and Lowry have already successfully test-flowed gas at rates of 12.3mn ft³/d and 22mn ft3/d respectively, from reservoirs 1,347 and 2,100 ft deep.
“These well tests have demonstrated good quality reservoirs similar to nearby and analogous fields that have been successfully developed and have delivered attractive production rates and gas recoveries,” Oilex said. Whitbeck, found at a greater depth of 5,383 ft, has not yet been tested.
Koru currently has an exclusive right to buy 100% interests in the three fields’ production licences from the UK’s Reach Coal Seam Gas. Oilex has paid Koru a £50,000 (US$62,400) exclusivity fee, with a view to subsequently acquiring 50% in each project.
“The licences, which incorporate discovered and tested gas volumes and comprise a portfolio of projects, provide the initial platform for the company to build the necessary critical mass for a sustainable UKCS business,” Oilex’s managing director Joe Salomon commented. “Having recently entered the [Australian] Cooper basin, and also come to an agreement with GSPC relating to the [Indian] Cambay licence, we are now making progress on three fronts, and significantly adding to the company’s opportunity set through which to build value for investors.”