Angus Energy signs sale agreement with Terrain

Angus Energy announced on Friday that it signed a sale agreement with Terrain Energy to acquire a 10% interest in the Brockham oil field, increasing its interest in the licence from 55% to 65%.

The AIM-traded firm said consideration for the deal included a cash payment of £0.1m, relinquishment of Terrain's existing debt to Angus Energy's wholly owned subsidiary Angus Energy Weald Basin No.3 at completion and the carry of Terrain's remaining 10% interest share of the upcoming well costs at Brockham.

In addition, for the 12 months following the agreement, Terrain agreed to vote in-line with the group on matters which are to be submitted to a vote, or require approval of all participants in the licence.

The transfer of the interest in the licence remained subject to approval by the licence parties and the OGA, which is expected in early 2017.

At the same time, Angus entered into an option with Terrain for £1 to acquire a 10% interest in the Lidsey oil field.

Following the exercise of the option and subsequent completion of the acquisition of the 10% interest, such a move would increase the group's interest in the Lidsey production licence to 60% in exchange for the carry of Terrain's remaining 10% interest share of the upcoming Lidsey-2 horizontal well and a cash payment of £0.02m on exercise of the option.

“We are delighted that through this transaction we have been able to materially increase our position in the Brockham and potentially the Lidsey production licenses,” said Angus Energy chairman Jonathan Tidswell-Pretorius.

“As stated at admission to AIM, we believe these two assets provide a strong core for the group with low-risk development opportunities from their existing production reservoirs and with the Weald basin providing further exciting upside potential.”