13th May 2009 07:00
LENI GAS & OIL Plc
("LGO")
13 May, 2009
Gulf of Mexico - Awarding of Six New Leases
Leni Gas & Oil plc (LGO) the AIM listed international oil and gas exploration, development and production company notes today's announcement from Leed Petroleum ("LDP"), confirming the award of the Eugene Island 133 and Ship Shoal 197 leases in the Gulf of Mexico under the Minerals Management Services ("MMS") Lease Sale 208.
The Eugene Island block is located approximately 110 miles southwest of New Orleans, Louisiana in 60 feet of water and the Ship Shoal block is located approximately 125 miles southwest of New Orleans, Louisiana in 102 feet of water. The leases will each be held for an initial five year "primary" term during which LDP will have the right to explore and produce hydrocarbons. Once production is established, normal lease terms will then apply.
LDP have also announced that the leases covering Ship Shoal block 205 and South Marsh Island blocks 5 and 6 will all expire by 30 July 2009. LDP said they have no plans to undertake any operations to hold the Ship Shoal 205 and the South Marsh Island 5 blocks for which LDP has no attributable reserves. LDP is investigating drilling options that would hold the South Marsh Island 6 lease, which has 674 MBOE of net probable reserves attributable to it and will make a further announcement if drilling is commenced.
In accordance with an area of mutual interest agreement arising under LDP's pre-existing scouting agreement with Byron Energy Pty. Ltd. ("Byron"), Byron will have the right to acquire up to 25% of LDP's working interest in the awarded leases.
LGO retains a 28.94% shareholding in Byron and announced on 08 April 2008 the completion of a Heads of Agreement with Byron to transfer the shareholding from an indirect to a direct ownership of its GoM oil and gas assets. This transfer is subject to Byron Energy shareholder approval; LGO qualifying under Mineral Management Service requirements to acquire the working interests in the Eugene Island assets and compliance to AIM rules.
Byron has also been advised by the Minerals Management Service ('MMS") that it will be awarded four leases in the MMS Central Gulf of Mexico Lease Sale 208 later this month. These leases include West Cameron Area, South Addition blocks 489, 490, 491 and West Delta Area block 49. Byron shall retain a 100% working interest and a 79.25% net revenue interest in these blocks.
Upon completion of the proposed indirect to direct conversion transaction with Byron, LGO will have the right to acquire up to 20% of Byron's interest in each of these leases.
David Lenigas, Executive Chairman, commented:
"Following our recent announcement of our intention to convert our Byron shareholding into a direct working interest in the Gulf of Mexico portfolio, today's announcement of the award of the Eugene Island 133 and Ship Shoal 197 leases to LDP and the imminent award of four leases to Byron is excellent news. These leases have tremendous potential for significant increases to production and are another step towards substantially increasing the value of our Gulf of Mexico acreage"
Competent Person's Statement:
The technical information contained in this announcement has been reviewed and approved by Fraser S Pritchard, Executive Director (Operations) for Leni Gas & Oil Plc (member of the SPE) who has 20 years relevant experience in the oil industry.
Enquiries:
Leni Gas & Oil plc
David Lenigas, Executive Chairman
Fraser Pritchard, Executive Director (Operations)
Tel +44 (0) 20 7016 5101
Beaumont Cornish Limited
Roland Cornish / Rosalind Hill Abrahams
Tel +44 (0) 20 7628 3396
Mirabaud Securities Limited
Rory Scott
Tel +44 (0) 20 7878 3360
Pelham PR
Mark Antelme / Henry Lerwill
Tel + 44 (0)20 3178 6242
NOTES TO EDITORS
Leni Gas & Oil Plc is an international oil and gas exploration, development and production company headquartered in London, trading on the London Stock Exchange's AIM index. The Company has assets in the US GoM and Lower 48, Spain, Trinidad, Hungary and Malta. LGO's strategy is delivering growth through the acquisition of proven reserves and the enhancement of producing assets in low risk countries.
The Eugene Island acreage is operated by Leed Petroleum, in which LGO has an indirect interest through its 28.94% holding in Byron Energy Pty Ltd ("Byron"). Byron has a 25% Working Interest in both Eugene Island Blocks 183 and the southern half of Block 184 (Net Revenue Interest up to 20.83% in Block 183 and 19.17% in the southern half of Block 184), including the Eugene Island 184A platform and production facilities. Byron has also a 12.5% Working Interest (Net Revenue Interest 9.58%) in the northern half Eugene Island Block 184 and 10.37% Working Interest (Net Revenue Interest 8.64%) in Eugene Island Block 172, excluding the Eugene Island 172 producing reserves and platform.
The details of the West Cameron and West Delta leases which are to be awarded to Byron are :
|
|
Area |
Byron |
Byron |
|
Bonus |
|
Block |
Acres |
WI (%) |
NRI (%) |
Operator |
($US 000) |
|
|
|
|
|
|
|
|
West Cameron Area, South Addition 489 |
5000 |
100.00% |
79.25% |
Byron |
136 |
|
West Cameron Area, South Addition 490 |
5000 |
100.00% |
79.25% |
Byron |
226 |
|
West Cameron Area, South Addition 491 |
5000 |
100.00% |
79.25% |
Byron |
226 |
|
West Delta Area 49 |
5000 |
100.00% |
81.25% |
Byron |
226 |
Leed Petroleum PLC
("Leed" or the "Company")
Leasehold Update
Successful Participation in MMS Lease Sale - Leed awarded two new leases
Leed Petroleum PLC (AIM: LDP), the oil and gas exploration and production company focused on the Gulf of Mexico, today announces that the Company has been awarded the Eugene Island 133 and Ship Shoal 197 leases in the Central Gulf of Mexico Minerals Management Services ("MMS") Lease Sale 208.
On 6 May 2009, the MMS confirmed acceptance of Leed's bids of US$350,567 and US$575,456 for the Eugene Island 133 and Ship Shoal 197 blocks respectively. The Eugene Island block is located approximately 110 miles southwest of New Orleans, Louisiana in 60 feet of water and the Ship Shoal block is located approximately 125 miles southwest of New Orleans, Louisiana in 102 feet of water. As soon as is practicable, Leed intends to add the Eugene Island 133 and Ship Shoal 197 drilling opportunities identified by Leed's technical team to the Company's drilling schedule.
The leases will each be held for an initial five year "primary" term during which the Company will have the right to explore and produce hydrocarbons. Once production is established, normal lease terms will then apply.
The two blocks are adjacent to blocks subject to the Scouting Agreement that exists with Byron Energy Pty. Ltd. ("Byron"), and as such these blocks are now subject to an area of mutual interest agreement between the companies which grants Byron the right to acquire up to 25% of the Company's working interest in both blocks. Byron has elected to acquire a 25% share in each of the blocks, and will pay the final instalment of its pro rata share of the acquisition costs shortly.
|
ASSETS (All are U.S.) |
OPERATOR |
INTEREST1 WI / NRI (%) |
STATUS |
LEASE EXPIRY DATE |
LEASE AREA (km2) |
COMMENTS |
|
Eugene Island Block 133 |
Leed Petroleum LLC |
75/ 60.9375 |
Exploration |
To be determined |
20.23 |
New lease acquired in MMS Central Gulf Lease Sale # 208 |
|
Ship Shoal Block 197 |
Leed Petroleum LLC |
75 / 59.8125 |
Exploration |
To be determined |
20.23 |
New lease acquired in MMS Central Gulf Lease Sale #20 |
1 Interest - Working interests (WI) are shown and are subject to various royalty and, in the case of the Ship Shoal 197 lease, overriding royalty payments. Net revenue interests (NRI) include any and all such payments.
Leasehold Terminations
The Company's leases covering Ship Shoal block 205 and South Marsh Island blocks 5 and 6 will all expire by 30 July 2009. Leed has no plans to undertake any operations to hold the Ship Shoal 205 and the South Marsh Island 5 blocks for which the Company has no attributable reserves. Leed is investigating drilling options that would hold the South Marsh Island 6 lease, which has 674 MBOE of net Probable reserves (less than 3% of Leed's 24.1 MMBOE of 2P reserves) attributable to it, and will make a further announcement if drilling is commenced.
Howard Wilson, President and Chief Executive of Leed Petroleum PLC, commented:
"We are delighted to be awarded the Eugene Island 133 and Ship Shoal 197 blocks. The leases are adjacent to Leed's existing lease holdings in the Ship Shoal 201 and South Marsh Island 8 fields and complement the Company's development plans for these fields adding to the depth of our inventory and providing operational synergies."
For further information please contact:
|
Leed Petroleum PLC |
|
|
Howard Wilson, President and Chief Executive |
+1 337 314 0700 |
|
James Slatten, Chief Operating Officer |
+1 337 314 0700 |
|
Matrix Corporate Capital LLP |
|
|
Alastair Stratton |
+44 20 3206 7204 |
|
Tim Graham |
+44 20 3206 7206 |
|
Buchanan Communications Ltd |
|
|
Ben Willey |
+44 20 7466 5118 |
|
Bobby Morse |
+44 20 7466 5151 |
|
Chris McMahon |
+44 20 7466 5156 |
NOTES TO EDITORS
Operations
Leed Petroleum PLC is an AIM quoted independent oil and gas exploration and production company. The Company's operations are concentrated in the Gulf of Mexico region where Leed has established a significant portfolio of producing and development assets. The Company has interests in 19 offshore fields and 1 onshore field in the region.
Leed's strategy is to grow the Company's portfolio through organic development of its existing assets and to utilise its regional expertise to identify and purchase value adding assets.
Review by a qualified person
The information contained in this announcement has been reviewed and approved by Chris Thompson, Manager of Business Development at the Company, BSC GradDip, who is a reservoir engineer (SPE) with over 17 years experience within the sector.
Definitions
MBOE - thousands of barrels of oil equivalent, calculated on the basis of one thousand cubic feet of gas equals one barrel of oil
MMBOE - million barrels of oil equivalent, calculated on the basis of one thousand cubic feet of gas equals one barrel of oil
Reserve Definitions
1P - Proved Reserves
2P - Proved and Probable Reserves
3P - Proved, Probable and Possible Reserves
Proved Reserves are the estimated volumes of crude oil, condensate, natural gas and natural gas liquids which, based upon geologic and engineering data, are reasonably certain to be commercially recovered from known reservoirs under existing economic and political/regulatory conditions and using conventional or existing equipment and operating methods. When probabilistic methods are used, reasonable certainty means there is a 90% probability that the quantities produced will exceed the estimate of proved reserves. Proved reserves are limited to those quantities of hydrocarbons which have been evaluated either by actual production or by analytical tools and methods which demonstrate reasonable certainty of future recovery.
Probable Reserves are those reserves which geologic and engineering data demonstrate with a degree of certainty sufficient to indicate they are more likely to be recovered than not. When probabilistic methods are used, there is at least a 50% probability that the quantities actually produced will exceed the sum of proved and probable reserves.
Possible Reserves are those reserves which geologic and engineering data demonstrate are less certain than probable reserves and can be estimated with a low degree of certainty, insufficient to indicate whether they are more likely to be recovered than not. When probabilistic methods are used, there should be at least a 10% probability that the quantities actually produced will exceed the sum of proved, probable and possible reserves.
Related Shares:
CERP.L