TORONTO, ONTARIO–(Marketwired – Aug. 29, 2016) – North Sea Energy Inc. (“NSE” or the “Company“) (TSX VENTURE:NUK) announces its unaudited financial results for the period ended June 30, 2016. The summary of the selected financial information should be read in conjunction with the Company’s Condensed Interim Consolidated Financial Statements (Unaudited) and the related Management Discussion and Analysis for the quarter ended June 30, 2016 dated August 29, 2016, which have been filed on SEDAR (www.sedar.com).
Highlights and subsequent events for the three months ended June 30, 2016
Statoil Bottom Hole Agreement
- NSE announced on June 6, 2016 that it is a party to a ‘Bottom Hole Contribution Agreement’ between Statoil (U.K.) Limited (“Statoil”) and Premier Oil UK Limited (“Premier”), in its capacity as the P.1943 Operator as agent for the P.1943 Group in respect of the 13/25-1 Bagpuss well (“the Well”).
Under the agreement, Statoil will pay up to US$260,000 ($338,234) for data recovered from drilling and up to an additional US$175,000 ($227,658) for data from testing of the Bagpuss well under certain conditions. The initial amount is to be paid for the well data while drilling the Well and the subsequent amount for testing data, if applicable. North Sea Energy (UK NO2) Limited (“NSE2”) is to receive payment for this data in proportion to its 15% working interest in the Bagpuss Licence P.1943.
The Drilling and Results of the Bagpuss Well
- The spudding of the Well occurred on July 18th, 2016 although the Bagpuss operations commenced on July 14th, 2016 when Ocean Valiant offshore drilling rig left the Solan development and arrived on site at the Bagpuss prospect July 16th, 2016.
- On August 5, 2016, NSE announced the Well results from Premier, the Operator, that the Well which was targeting the Bagpuss prospect on the Halibut Horst in the Outer Moray Firth reached a total depth of 1,532 feet (TVDSS) in granite basement. The Well was drilled approximately 2 km from the 1981 Amoco well in the same structure.
The Well encountered 41 feet of hydrocarbon-bearing sands within a 68 feet hydrocarbon column. This is in line with pre-drill estimates. The sands have between 25%-33% porosity and initial indications were that the oil is heavy which was expected. The Well was plugged and abandoned in accordance to the drilling plan.
Premier’s Director of Exploration commented:
“The Bagpuss well has successfully proven a significant volume of oil in place. We will now work with our partners to carry out a full analysis of the hydrocarbons and reservoir encountered with a view to ascertaining whether commerciality can be established.”
For further information on the Bagpuss and Blofeld Prospects in our Independent Prospective Resource Assessment, please refer to the press release dated June 27, 2013 posted on www.sedar.com.
NSE’s costs relating to the Well have been carried by Maersk Oil UK. The Company is also funded for 50% of its costs on a Bagpuss subsequent well, should one be drilled, subject to a cap, through its farm-in agreement with Maersk Oil UK.
- On August 19, 2016, NSE provided a further update on the Bagpuss drilling results (see full press release dated August 19, 2016 filed on www.sedar.com):
Premier’s senior management espoused the following concerning the Bagpuss prospect:
- Bagpuss is a heavy oil discovery as anticipated and the well results came in on prognosis in terms of the reservoir;
- The analysis of the geochemistry of the samples collected is still going on, the results of which will tell us more about the flow properties of the oil in due course;
- The Bagpuss well was drilled on the Halibut Horst which is very large granite structure, so the reservoir is hotter when the granite is that close to the surface;
- The Bagpuss well confirmed a significant volume of oil in place;
- The temperature of the well was about the same temperature as the original 1981 Amoco well [44°C, 111°F] due to the raised geothermal gradient over the granite horst.
- The Bagpuss Well, a vertical well, was always planned to be an informational well only and in accordance with the original Well Plan it was plugged and abandoned upon completion. Should development of the Bagpuss field take place, it would most likely be done with horizontal wells.
While NSE management believes the information regarding the Bagpuss Prospect to be accurate, it will wait until the full technical analysis of the collected data is finalized before commenting on the Bagpuss results.
|Selected Quarterly Information|
|For the three months ended||For the six months ended|
|June 30,||June 30,||June 30,||June 30,|
|CAD ($)||CAD ($)||CAD ($)||CAD ($)|
|(except per||(except per||(except per||(except per|
|share data)||share data)||share data)||share data)|
|Profit/(loss) before income tax||(165,885||)||179,837||(485,565||)||(40,217||)|
|Total comprehensive profit/(loss)||(197,399||)||308,059||76,512||(581,152||)|
|Basic net profit/(loss) per share||(0.003||)||0.003||(0.008||)||(0.001||)|
|Diluted net profit/(loss) per share||(0.003||)||0.002||(0.008||)||(0.001||)|
|June 30,||December 31,||June 30,|
|CAD ($)||CAD ($)||CAD ($)|
The above noted financial data should be read in conjunction with the period ended June 30, 2016 condensed interim accordance with International Accounting Standards (“IAS”) 34 – Interim Financial Reporting.
NSE’s forward plan is to review the analysis of the results of the Bagpuss well with the joint-venture partnership to ascertain the viability of the Bagpuss and Blofeld prospects. If the prospects are determined to be viable, NSE will vote to renew the P.1943 licence for an additional four (4) years commencing on December 31, 2016 as the conditions of the current licence appear to have been met. As the Operator releases additional data concerning the results of the Bagpuss well over the coming weeks and any decisions regarding licence renewal, NSE will announce the finding in accordance to TSX-V policy and in accordance to our Joint Venture Agreement (JOA) with the Bagpuss and Blofeld co-venturers.
NSE plans to open a data room as soon as practically possible should the results of the analysis be positive to either farm-out a portion of its Bagpuss and Blofeld assets or sell a portion or all of its asset. The management and board of NSE will also look at strategic options to meet its liquidity requirements.
The Company, founded in February 2007, is a UK focused oil and gas exploration and appraisal company quoted on the TSX-V. NSE, along with its wholly owned subsidiary, North Sea Energy (UK NO2) Limited, holds two high impact opportunities in the UK North Sea. These opportunities are the Bagpuss and Blofeld prospects located in blocks 13/24c and 13/25 of the UKCS.
Except for statements of historical fact, this news release contains certain “forward-looking information” within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “expect”, “forecast”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information.
In particular, there can be no certainty that analysis of the hydrocarbons and reservoir will result in commerciality being established. Factors which may cause commerciality not to be established include risks and uncertainties such as analysis concluding that the hydrocarbons are not of a commercially interesting grade, logistical challenges associated with extracting in the North Sea, oil prices, access to financing (for a full list of risks please refer to our financial statements and management discussion and analysis filed on www.sedar.com).
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
North Sea Energy Inc.
J. Craig Anderson
Chairman & CEO