NORTH Sea pioneer Cluff Natural Resources (CLNR) has generated strong interest in a bumper oil prospect off Scotland months after winning an endorsement for its exploration skills from a sector giant.
The company appears to be confident it will be able to enlist partners to work on the 270 million barrel Dewar prospect after getting a good response to its effort to get firms to buy in to the plan.
“The prospect has generated a significant amount of interest and there are a number of established operators currently in the project dataroom,” CLNR told investors yesterday.
The update provides a further sign that relatively small independents such as CLNR are playing an outsize role in stimulating activity in the North Sea.
North Sea exploration deal coup for oil and gas pioneer
Under the leadership of North Sea pioneer Algy Cluff, the company stepped up activity in the area as many firms slashed spending amid the downturn triggered by the crude price plunge from 2014.
Aim market-listed CLNR achieved a coup in February when Royal Dutch Shell bought in to a licence containing the Pensacola gas prospect. This is estimated to contain the equivalent of 100 million barrels oil. The potential of the licence was spotted by CLNR.
In April Shell acquired a stake in another North Sea licence operated by CLNR, which contains the Selene prospect.
Shell sold a big North Sea portfolio to Chrysaor for up to $3.8 billion in 2017 as it retrenched in the area.
North Sea shake-up could provide big spur to activity in area
CLNR said yesterday that the partners continue to work towards making a well investment decision on Selene and drilling one at the soonest possible opportunity.
They expect to make a well investment decision on Pensacola before the end of November 2020.
Now led by Graham Swindells, CLNR is preparing to step up activity across the wider North Sea area.
The company said it had submitted multiple applications for additional licences in the UK Oil & Gas Authority’s latest 32nd UK Offshore Licensing Round.
“We have made significant investment in this latest licensing round which has allowed us to submit multiple high quality applications in our core areas of the Southern North Sea and Central North Sea where we have already demonstrated success,” said Mr Swindells, who became chief executive in February last year.
He added: “ The blocks applied for contain a number of drilled discoveries, undrilled prospects and leads and, if awarded, will build scale, further diversifying the investment portfolio and significantly enhancing the Company’s resource base which we anticipate will create a strong pipeline of future drilling opportunities.”
Algy Cluff returns to his roots with new military charity
Mr Cluff stepped back to devote more time to other interests which include the Remembrance Trust charity he launched to care for the graves of members of the British armed forces which lie in other countries.
The former guardsman achieved renown for starting the firm that made the giant Buchan find off Scotland in 1975 before enjoying success in gold mining in Africa.
He founded Cluff Natural Resources in 2012 and refocused the firm on the North Sea after plans to generate gas by burning coal under the Firth of Forth ran into official opposition. Campaigners have said gasification poses risks to the environment.
Mr Cluff retired from the chairmanship of the firm in May. Mark Lappin succeeded him.
Shares in Cluff Natural Resources closed up two per cent, 0.03p at 1.35p leaving it with a stock market capitalisation of around £19m.
Hurricane Energy has helped stoke huge interest in a relatively under-explored area West of Shetland thanks to its success with the drill bit.
Oil strike West of Shetland fuels hopes of boom in frontier area
Last year the Sprit Energy business owned by Centrica and German investors bought in to acreage held by Hurricane and agreed to fund an $180m drilling campaign on it.
Jersey Oil & Gas made a promising find in the Moray Firth in 2017 after persuading Equinor to invest in the area.
In November last year Azinor Catalyst discovered oil on a licence off Shetland months after Edinburgh-based Cairn Energy took a stake in the relevant licence.
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