Andalas Energy and Power Plc Operations update

 
TIDMADL 
 
20 August 2018 
 
                         Andalas Energy and Power Plc 
 
                         ('Andalas' or the 'Company') 
 
Results of work programme and completion of acquisition of additional interest 
 
Andalas Energy and Power Plc, the AIM listed upstream oil and gas and energy 
company (AIM: ADL), is pleased to provide an update on its investment in Eagle 
Gas Limited ("Eagle").  Eagle's operating subsidiary Holywell Resources Limited 
("Holywell" or "Operator") now has the results of the 2018 seismic 
interpretation work programme on Southern North Sea Licence P2112 ("Licence"), 
which contains the gas prospect known as Badger. 
 
Highlights: 
 
  * 2018 technical work programme completed thereby completing the Licence 
    commitment. 
 
  * Following the interpretation of the reprocessed 3D seismic covering the 
    block, Holywell has assessed the resource potential of the Badger gas 
    prospect: 
 
      + Four seismic horizons mapped to represent prospective sandstone 
        reservoir objectives: Base Ketch, Westphalian B (Murdoch equivalent), 
        Westphalian A and Namurian (Trent equivalent) layers. 
 
      + Gross mean prospective resources assessed to be 399 Billion cubic feet 
        (Bcf) of recoverable gas (net of inerts and liquids) and 3.9 million 
        barrels of natural gas liquids. 
 
  * Potential exploration well location identified to target 2 of the 4 
    objectives. 
 
      + The well would be drilled in water depth of circa 45 metres (148 feet) 
        to a total depth (TD) of circa 4,200 metres (13,800 feet). 
 
  * Proposed well location is approximately 35 kms from local infrastructure, 
    including the Perenco operated Eagles Transport System (ETS) pipeline that 
    could, subject to negotiation, be the evacuation route for the produced gas 
    to the Bacton terminal, North Norfolk. 
 
  * Completion of acquisition of increased interest in Eagle (announced 25 July 
    2018): 
 
      + Andalas now has a 25% interest in Eagle. 
 
      + Andalas has issued 2,941,176 consideration shares to Eagle. 
 
      + Simon Gorringe appointed to the board of Eagle. 
 
Simon Gorringe, CEO of Andalas Energy and Power Plc said: "We believe that the 
definition of a prospective resource is validation of our decision to 
participate in the project via our investment in Eagle.  Badger is a 
significant gas prospect, which has the potential to be one of the larger 
discoveries in recent years in the UK Southern North Sea. 
 
"The programme finished on time and on budget.  The next steps for the project 
include the presentation to the UK OGA and for the joint venture partners to 
agree a forward plan under which they can progress the project." 
 
Table 1 Gross prospective unrisked resources (Note 1 and 2): 
 
                          GIIP (bcf) *      Recoverable Gas (bcf)    Recoverable Liquids    GCOS 
                                                      *                   (MMstb) *         (%) 
 
                     P90  P50   P10   Mean  P90  P50   P10   Mean  P90  P50   P10   Mean 
 
Badger: Westphalian 
A 
 
 - Compartment A      22   48   102    57    17   36   77     43   0.1  0.3   0.8    0.4    34% 
 
 - Compartment B      22   49   107    59    17   37   81     44   0.1  0.3   0.9    0.4    34% 
 
 - Compartment C      19   49   124    64    15   37   94     48   0.1  0.3   1.0    0.5    26% 
 
Badger: Westphalian 
B 
 
 - Murdoch sst        24   62   138    74    18   46   104    55   0.1  0.3   0.7    0.4    28% 
 
Badger: Namurian 
 
 - Trent sst          54  121   268   146    40   90   202   110   0.3  0.8   1.9    1.0    30% 
 
Badger: Lower Ketch 
 
 - Ketch              64  140   297   166    38   84   180    99   0.4  1.0   2.2    1.2    22% 
 
                               Total  566             Total  399             Total   3.9 
 
Table 2 Net (to Holywell) prospective unrisked resources* 
 
                          GIIP (bcf) *         Recoverable Gas (bcf) *  Recoverable Liquids   GCOS 
                                                                             (MMstb) *         (%) 
 
                     P90   P50   P10    Mean   P90   P50   P10    Mean  P90  P50  P10  Mean 
 
Badger: Westphalian 
A 
 
 - Compartment A    14.7  32.0   68.0   38.0  11.3  24.0   51.3   28.7  0.1  0.2  0.5   0.3    34% 
 
 - Compartment B    14.7  32.7   71.3   39.3  11.3  24.7   54.0   29.3  0.1  0.2  0.6   0.3    34% 
 
 - Compartment C    12.7  32.7   82.7   42.7  10.0  24.7   62.7   32.0  0.1  0.2  0.7   0.3    26% 
 
Badger: Westphalian 
B 
 
 - Murdoch sst      16.0  41.3   92.0   49.3  12.0  30.7   69.3   36.7  0.1  0.2  0.5   0.3    28% 
 
Badger: Namurian 
 
 - Trent sst        36.0  80.7  178.7   97.3  26.7  60.0  134.7   73.3  0.2  0.5  1.3   0.7    30% 
 
Badger: Lower Ketch 
 
 - Ketch            42.7  93.3   198   110.7  25.3  56.0  120.0   66.0  0.3  0.7  1.5   0.8    22% 
 
                                 Total 377.3               Total 266.0           Total  2.6 
 
*Andalas has a 25% shareholding in Eagle, which is the 100% owner of Holywell, 
which is the owner of 66 2/3% of the licence. 
 
Note 1: The work carried out using international resources and reserves 
reporting and classification standard adopted by the AIM market of the London 
stock exchange - the March 2007 SPE/WPC/AAPG/SPEE Petroleum Resources 
Management System ("PRMS"). 
 
Note 2: Prospective Resources are those estimated quantities of hydrocarbons 
that may be potentially be recovered by the application of a future development 
project(s) relate to undiscovered accumulations. These estimates have both an 
associated risk of discovery and a risk of development. Further exploration, 
appraisal and evaluation is required to determine the existence of a 
significant quantity of potentially moveable hydrocarbons. 
 
Issue of Equity 
 
The Company has issued 2,941,176 nil par value ordinary shares in Andalas to 
Eagle ( "Consideration Shares") and therefore completed the acquisition of its 
additional interest, thereby taking its interest in Eagle to 25%. The 
Consideration Shares which will rank pari passu with existing Ordinary Shares. 
Application will be made to the London Stock Exchange for the Consideration 
Shares to be admitted to trading on AIM and it is expected that dealings in the 
consideration shares will commence on or about 21 August 2018. 
 
Total voting rights 
 
Following Admission of the Consideration Shares, expected on or around 21 
August 2018, the Company's issued share capital will consist of 296,184,423 
ordinary shares of nil par value ("Ordinary Shares"), with each Ordinary Share 
carrying the right to one vote. The Company does not hold any Ordinary Shares 
in treasury. This figure of 296,184,423 Ordinary Shares may therefore be used 
by shareholders in the Company as the denominator for the calculations by which 
they will determine if they are required to notify their interest in, or a 
change in their interest in, the share capital of the Company under the FCA's 
Disclosure Guidance and Transparency Rules ("DTRs"). 
 
Reserves and Resources Cautionary Statement 
 
Oil and gas reserves and resource estimates are expressions of judgment based 
on knowledge, experience and industry practice.  Estimates that were valid when 
originally calculated may alter significantly when new information or 
techniques become available.  Additionally, by their very nature, reserve and 
resource estimates are imprecise and depend to some extent on interpretations, 
which may prove to be inaccurate.  As further information becomes available 
through additional drilling and analysis, the estimates are likely to change. 
This may result in alterations to development and production plans which may, 
in turn, adversely impact the Company's operations.  Reserves estimates and 
estimates of future net revenues are, by nature, forward looking statements and 
subject to the same risks as other forward looking statements. 
 
Qualified Person's Statement 
 
The technical information contained in this announcement has been reviewed and 
approved by Mr. Gregor Mawhinney. Mr. Mawhinney is consulting for Andalas, 
acting in the role of Vice President Operations. He has nearly 40 years 
experience in the oil and gas industry,  is a member of the Society of 
Petroleum Engineers (SPE) and a member of the Professional Engineers and 
Geoscientists of Newfoundland and Labrador (PEGNL). 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information as stipulated under the Market Abuse Regulations 
(EU) No. 596/2014 ('MAR).  Upon the publication of this announcement via a 
Regulatory Information Service ('RIS'), this inside information is now 
considered to be in the public domain. 
 
For further information, please contact: 
 
Simon Gorringe  Andalas Energy and Power Plc               Tel: [phone] 
                                                           5800 
 
Roland Cornish/ Beaumont Cornish Limited                   Tel: [phone] 
James Biddle    (Nominated Adviser)                        3396 
 
Colin Rowbury   Novum Securities Limited                   Tel: [phone] 
                (Joint Broker)                             9427 
 
Christian       Optiva Securities Limited                  Tel: [phone] 
Dennis          (Joint Broker)                             1881 
 
Glossary: 
 
Unless otherwise stated, words and expressions used in this announcement have 
the same meaning as is given to them in the SPE Peteroleum Resources Management 
System. 
 
bbl                Barrel 
 
Bcf                Billions of cubic feet 
 
best (or mid)      or P50, a 50% probability that a stated volume will be 
estimate           equalled or exceeded 
 
GCOS               Geological chance of success 
 
GIIP               Gas initially in place 
 
high estimate      or P10, a 10% probability that a stated volume will be 
                   equalled or exceeded 
 
low estimate       or P90, a 90% probability that a stated volume will be 

                   equalled or exceeded 
 
MMbbl              million barrels 
 
Recoverable Gas    Those quantities of hydrocarbon gas which are estimated 
                   to be producible from accumulations, either discovered or 
                   undiscovered. 
 
Recoverable        Those quantities of hydrocarbon liquids which are 
Liquids            estimated to be producible from accumulations, either 
                   discovered or undiscovered. 
 
 
 
END 
 

(END) Dow Jones Newswires

August 20, 2018 02:00 ET (06:00 GMT)