28th Jun 2016 13:46
LONDON (Alliance News) - Regency Mines PLC on Tuesday said its focus has moved to larger oil and gas assets which are entering into or coming out of insolvency proceedings, having previously looked to buy low-cost onshore near-term productions.
The natural resource development and investment company said it currently has a portfolio of three oil and gas opportunities which offer "some combination of scale, upside and cash flow potential", after having moved the focus towards larger projects.
Regency currently has three core oil assets and opportunities, it said.
Regency said it is looking to make an equity investment in around 10% of Westport Energy PLC, a UK-based company which is finalising its purchase of gas assets located in the Pacific Northwest, after Westport's planned initial public offering later this year.
Regency said it has, to date, subscribed for 21,775 shares in Westport for a total consideration of GBP175,000 via a pre-IPO funding round and has agreed to subscribe for a further GBP350,000 as a keystone investor of the planned IPO.
Meanwhile at the Western US Oil project in Virginia, Regency said it is working on securing both the single wellbore and an associated farm-out agreement, having partnered with a local operator with knowledge in the region. The partners would then complete the well and bring it into production, Regency said and, if successful Regency will own a 75% working interest in the wells and a 60% net revenue interest.
Regency has agreed to carry its partner for 25% of the cost of the completion of the first well.
Regency said investment company Horse Hill Development Ltd, in which it holds 5.0% interest and which is developing a project near Gatwick Airport in the UK, has completed flow tests at the site.
The findings from the initial exploration well indicated "vastly expanded development potential and reserves available in the Weald Basin, changing the generally held understanding of the region", Regency said, noting that currently, planning is underway for extended flow tests over 90 day periods that will take the currently proved commercial flow rates and determine whether these equate to commercial production rates.
Regency said its Motzfedlt field in Greenland, which it holds in its entirety, is still considered to be a "useful part of its portfolio" and said it "continues to seek opportunities to partner and monetize these assets as appropriate".
Regency noted it has dropped its Lake Trist exploration nickel assets in Papua New Guinea and has suspended its earn-in agreement with International Mineral Resources Ltd for a potash and phosphates project in Sudan.
"We have continued to hold those assets with both scale and identified mineral resources through the lows of the cycle, and over three years we have worked to add bottom of the cycle oil and gas opportunities. We have worked the remaining portfolio to divest and to generate liquidity opportunities. Regency has a very low cost base, multiple potential income streams, and several potential company-makers in its portfolio. We will continue on this path," said Chairman Andrew Bell.
Shares in Regency were down 2.6% at 0.365 pence on Tuesday.
By Hannah Boland; [email protected]; @Hannaheboland
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