Australia-based Oilex is looking to form a joint venture with Koru Energy to develop three offshore gas discoveries in the UK
Australian oil and gas firm Oilex has signed an exclusivity agreement to potentially acquire up to 50% stake in the Knox and Lowry, and Whitbeck gas discoveries (KLW) in the East Irish Sea from Koru Energy.
Currently, Koru Energy has the exclusive right to buy a 100% stake in the UK Seaward Production Licence P2459, Block 113/28a, containing the Knox discovery, 113/29a, containing the Lowry discovery, and P2444 Block 110/3b, containing the Whitbeck discovery from Reach Coal Seam Gas.
Oilex and Koru Energy plan to form a joint venture
The offshore UK licences will be held on a 50:50 basis between Oilex and Koru Energy under a joint venture structure, called the KLW Joint Venture. Koru Energy will be the operator of the joint venture.
The three gas discoveries are said to be a series of shallow water gas accumulations and were made between 1992 and 2009 by the then operators.
According to Oilex, the offshore gas discoveries are ideally situated in close proximity to a subsea tie-back pipeline which transports gas to the nearby and recently refurbished North Morecambe Gas Production Platform and Terminal.
Furthermore, the KLW gas discoveries are contained in known conventional shallow reservoirs in shallow water near existing gathering and production infrastructure. The Australian oil and gas firm believes that this factor will help in reducing the complexity, risk and cost of development of the three gas discoveries.
The Knox and Lowry gas discoveries are said to be in a well advanced stage having flowed gas successfully when drill stem tested with reported raw gas flows of 12.3MMCFD and 22MMCFD, respectively.
Oilex said that the well tests have shown good quality reservoirs identical to nearby analogous fields that have been developed successfully and have yielded attractive production rates and gas recoveries.
Oilex managing director Joe Salomon said: “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.
“Having recently entered the Cooper Basin, and also come to an agreement with GSPC relating to the 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.”