Reabold, the investor in upstream oil and gas projects, today provided an update on the Victory Gas Discovery, which is located in the north-west region of the Shetland Isles. Reabold has a 49.99 per cent. interest in Corallian Energy, which has a 100 per cent. interest in Victory and is the operator of the asset.

Highlights:

• Victory Environment Baseline Survey ("EBS") successfully completed
• The EBS is a key milestone for the submission of a draft Field Development Plan ("FDP") to the UK's Oil and Gas Authority ("OGA"), planned for the end of 2021
• Reabold provided the funding to Corallian for the EBS by way of a Convertible Loan Instrument as announced on 22 February 2021

Data acquisition for the Victory EBS was successfully completed on 23 June 2021, with the survey completed within the budget estimate and with zero health and safety incidents. Data acquired include side-scan sonar, multibeam echosounder, seabed sediment samples, and video and camera stills over the proposed project sites. This data will be used to complete an Environmental Impact Assessment and ultimately an Environmental Statement for the Victory project. Data and sample processing and interpretation with take approximately four months.

The Environmental Statement remains on schedule to be submitted to the relevant UK authorities, together with the Victory draft FDP, by the end of 2021. Additional updates will be provided during the second half of the year as further progress is made towards FDP submission.

Victory is considered by Corallian to be a simple, low-risk gas development which has been fully appraised and requires no additional pre-development drilling. SLR Consulting estimates that Victory has 2C resources of 157 BCF and NPV10 valuations ranging from circa £85 million (based on a price forecasts of 42.5p/therm) to circa £146 million (based on historical average gas prices and base case valuation of 50p/therm).

Stephen Williams, co-CEO of Reabold, commented:
"We are pleased with the continued progress at the Victory Gas Discovery, which we believe is a simple and low-risk project, as we move closer to the submission of a draft Field Development Plan later this year. Victory is a sizable asset for Reabold, complements our existing assets and fits with our strategic objective of delivering near-term project activity and value creation. Victory's location near to existing infrastructure, including the Greater Laggan Area, makes it a highly attractive development project in our view."

Victory Gas Discovery

The Oil and Gas Authority (OGA) offered to Corallian 100% interests in the Victory gas discovery in block 207/1a, the Laxford gas discovery and Scourie prospects in blocks 214/29c and 214/30c, and the Oulton oil discovery in block 3/11a.

In February 2020, Reabold offered Corallian a £1 million convertible loan to help fund an offshore environmental study during the summer of 2021 and to undertake other activities to support the planned submission of the Victory draft Field Development plan to the OGA at the end of 2021. The loan interest (15% per annum) will be rolled up and be convertible into ordinary shares within 21 months at £3.20 per share.

First gas production is anticipated in Q4 2024. From 2025, a 3-year gas production plateau is planned at 70 mmscf/d (11,666 boepd), delivering over 25 BCF gas per year.

The Victory project value (NPV10) is estimated to be circa £85 million based on current gas price forecast of 42.5 pence per therm to ca. £146 based on the historical average gas price of 50p/therm. Therefore, the value (NPV10) of Victory, net to Reabold, based on its 36.9% interest in Corallian, is £31m – £54m.

KeyFacts Energy: Reabold Resources UK country profile