Reabold Resources PLC (LON:RBD) Co Chief Executive Officer Sachin Oza caught up with DirectorsTalk for an exclusive interview to discuss the West Newton A-2 appraisal well and provides an update on Mica-1 in Romania.
Q1: A few announcements this week, firstly the West Newton A2 appraisal well. Sachin, can you tell us about this news?
A1: So, the West Newton A-2 appraisal well successfully appraised, it was the primary Kirkham Abbey formation that was first discovered in 2013 with the West Newton A-1 well and this is in East Yorkshire, close to Hull.
The A-2 well results correlated very favourably with that original A-1 and reservoir characteristics including things like net pay exceeded our expectations as well as the presence of liquids. So, the original Competent Person’s Report that indicated a 2C Contingent Resource of 189 Bcfe of gas equivalent is very well supported as it the project NPV of $207 million.
It’s important to highlight just what the scale of this accumulation is as it is potentially the largest ever onshore UK gas field and one of the largest ever hydrocarbon accumulation onshore UK.
For all of these reasons, it’s a very exciting project.
Q2: Why is it so exciting for Reabold Resources?
A2: Our exposure to this project is in effective 24% economic interest through its 36% equity holding in Rathlin, the operator of the licence area, so clearly with those types of economics and that scale our exposure makes West Newton highly significant for our shareholders.
Q3: We are the next steps for the project?
A3: The immediate next steps in Q3 would be to test the well by way of an extended well test and that’s to give an idea of what the flow rates are going to be from this well and we very much look forward to that.
We would then plan to drill a well from the West Newton B site, that fully permitted, and that’s to appraise the Kirkham Abbey formation but it’s also to test the optimal place to test the Cadeby formation. The Cadeby is an oil target which had oil shows both in the A-1 and the A-2 and this Cadeby oil potential could be even larger than the Kirkham Abbey but needs to be properly evaluated by this B well.
Q4: We also saw an Operations Update at Mica-1 in Romania, can you talk us through the highlights?
A4: Through Danube Petroleum, the company is exposed to a drilling campaign in Romania.
The IM-1 well, and we believe one of the lowest risk pre-drill wells that we’ve got, will be commencing shortly as was announced in the update. The permits are all in place, construction is just beginning for that programme and we look forward to the drilling results of IM-1.
It’s worthwhile saying we also have fully permitted the IM-2 well and after the results of the IM-1 well, RBD are able, at low cost, to increase its exposure to Danube Petroleum and also allow the funding of that IM-2 well.
So, we look forward to the campaign and very excited by it.
Q5: What’s the forward plan there for Reabold Resources PLC?
A5: Initially, as I was saying, it the drilling of these two wells and what we are essentially doing is re-drilling gas discoveries from this appraisal programme. These gas discoveries can be put into production relatively quickly because of nearby infrastructure and a nearby gas processing facility that has spare capacity.
The ability to tie in these discoveries into that gas processing facility and allow us to start monetising the discoveries that we hope to be making means that we can start bootstrapping our way to start exploring throughout the rest of the license area which has a significant amount of potential beyond the next two appraisal wells.