Reabold Resources, the AIM quoted investing company with a portfolio of upstream oil and gas projects, has announced the execution of a Sale and Purchase Agreement ('SPA') for the conditional acquisition of Simwell Resources.

Key Highlights:

• Reabold is to acquire Simwell at a low acquisition cost with a total initial consideration, plus the repayment of all outstanding creditors/liabilities, of £1 million
• The transaction substantially increases Reabold's footprint in the emerging Zechstein trend, complementing its onshore position in PEDL183, including the West Newton project
• The licences have a number of prospects covered with high quality 3D seismic data
• Licence P2332 has prospects to be derisked by success at the Pensacola well

The transaction is conditional on, inter alia, customary conditions for a transaction of this nature, including approval by the North Sea Transition Authority ('NSTA').  If the conditions are not satisfied or waived (as applicable) within 12 months of the date of the SPA, the SPA shall terminate.

The SPA contains customary warranties and a tax indemnity from the Sellers. The SPA further provides that the Sellers will be subject to a lock-in undertaking (save for customary exceptions) in respect of (i) the Initial Consideration Shares for a period of 6 months following completion of the SPA and (ii) the Deferred Consideration Shares for a period of 6 months following the date of issue of the Deferred Consideration Shares. 

Asset Summary:

Simwell has a 30% equity interest in licence P2332 following a farmout to Shell U.K., which is now the operator with a 70% equity interest. Shell acquired a 640 km² 3D seismic survey in the area covering licence P2332 in August 2019, funding Simwell's 30% share. The survey also covered parts of the adjacent licence P2252, which contains the Pensacola prospect that has been stated by Deltic Energy to have a P50 gross prospective resources of 309 bcf and is planned to be drilled in Q4 of 2022. Simwell believe that success at Pensacola would derisk a number of similar prospects in P2332. Shell will continue to fund 100% of the licence costs until a drilling election is made. 

For licences P2329, P2427 and P2486 a 3D seismic survey was acquired over the licences in the summer of 2019 where several prospects have been identified. The new 3D PSTM provides a high-definition view of the Zechstein Hauptdolomite play. A further number of prospects, with 4-way closure, have been identified and are believed to lie on trend to the Ossian-Darach oil discovery, c. 40km to the west.

Admission to AIM:

Following completion of the Transaction, application will be made for the admission to trading on AIM of the Initial Consideration Shares and Creditor Shares, and a further announcement will be made in due course.

Stephen Williams, Co-CEO of Reabold, commented:
"We are delighted to be able to acquire this set of highly prospective assets at a compelling valuation. This extends our significant position in the emerging Zechstein play into the offshore, and at an exciting time for the play ahead of the drilling of Pensacola."

KeyFacts Energy: Reabold Resources UK country profile