Cabot Energy (AIM: CAB), the AIM quoted oil and gas company focussed on creating predictable production growth in Canada, announces that Ouro Preto Resources Pty Ltd, the Company's wholly-owned subsidiary, has reached an agreement with The Department for Energy and Mining of the Government of South Australia ("DEM") to relinquish its PEL 629 onshore exploration licence in the Otway Basin, South Australia (the "Licence").
Image: An offshore oil and gas drilling platform. Photo: courtesy of QR9iudjz0/Freeimages.com.
The Company has received confirmation from DEM that it will be granted permission to vary out current commitments of its second year PEL 629 work programme for a nominal fee. The formal application for variation and relinquishment of the Licence has been submitted and the relinquishment is expected to take immediate effect. The Company will not incur any further costs or penalties associated with the outstanding work programme.
The Licence had been in suspension since June 2014 to allow the Company to carry out further technical work and evaluation. As at 31 December 2018, the Net Book Value was zero, with the majority of the asset impairment (USD $970,000) booked in 2015.
Scott Aitken, CEO of Cabot Energy, commented: “We are grateful to The Department for Energy and Mining for agreeing to a low-cost relinquishment of this licence in South Australia. The management team believes it is responsible practice to focus financial and operational resources on delivering value from the Company’s core assets. This means prioritising our Canadian land position, which has a production facility capacity of up to 10,000 barrels of oil per day, along with our highly unique, leading licence position in Italy with 1 billion barrels of identified prospects and discoveries.”
Source: Company Press Release