Posted on: February 8, 2019

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Gneiss Energy acts as commercial adviser to Cluff on the farm-out of two UK North Sea licences to Shell

Gneiss Energy is pleased to announce that it has acted as commercial adviser to Cluff Natural Resources Plc (“Cluff”) on entering into a binding, conditional farm-out agreement and a three month exclusive option with Shell U.K. Limited (“Shell”) in relation to Cluff’s Southern North Sea Licences P2252 and P2437, respectively.  Cluff announced the farm-out to Shell earlier today.

P2252 farm-out: Under the terms of the farm out agreement, Shell will acquire a 70% working interest in Licence P2252 in return for paying 100% of the costs of an agreed forward work programme, consisting of not less than 400 km2 of new broadband 3D seismic data over the Pensacola prospect in the summer of 2019, and the subsequent processing of new and existing seismic data and sub-surface studies required to support a well investment decision before the end of 2020.  P2252 contains the Pensacola prospect, which is estimated to contain unaudited mean in place prospective resources of 566 BCF (equivalent to approximately 100 mmboe).

P2437 farm-out: Cluff has granted Shell the option to acquire a 50% working interest by 30 April 2019.  If the option is exercised, Cluff will retain a 50% working interest and operatorship until a well investment decision is made, with Shell paying the costs to date.  The consideration receivable by Cluff is US$600,000, which is comprised of an initial payment and further payment upon completion.  If a decision is taken to drill an exploration well on P2437, Shell will pay a share in proportion of 1.5 : 1.0 of the cost of an exploration well and the well test, subject to an aggregate cap of US$25,000,000.  Shell would therefore pay 75% of costs up to a total of US$25,000,000.  P2437 contains the Selene prospect, which is estimated to contain unaudited mean in place prospective resources of 509 BCF (equivalent to approximately 90 mmboe) and is located adjacent to Shell-operated infrastructure associated with the Barque gas field.

Cluff is an AIM-quoted natural resources investing company with a high impact exploration and appraisal portfolio focused on the Southern and Central North Sea.

Link to RNS


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