Reabold Resources PLC (AIM:RBD) told investors it is upping its stake in Rathlin Energy, which has approval to begin a development programme of its West Newton onshore gas project in East Yorkshire.
With the purchase of another 20.40% of the shares from Connaught Oil & Gas for a cash consideration of £0.70 million, subject to Connaught shareholder approval, the transaction will increase Reabold’s shareholding in Rathlin to 79.8%.
This gives Reabold an effective economic interest in the PEDL 183 licence that covers West Newton to 69.9%, on top of the 16.665% that it owns directly in the licence.
The East Yorkshire project is the largest undeveloped onshore gas field in the UK, Reabold said, and is estimated to have a pre-tax NPV(10) of US$179.00 million net to Reabold under an existing full-field development plan.
Revised work programmes approved by the North Sea Transition Authority outline key steps for the development of PEDL 183, including re-entering and recompleting or sidetracking suspended wells and submitting a field development plan by mid-2027.
Rathlin, as the operator, has applied for reservoir stimulation at the West Newton A-2 well to further de-risk the project.
A gas export feasibility study highlighted the potential for accelerated production and cash flow via a single well development plan.
This initial phase would require approximately £12.00 million in capital expenditure, with first gas projected 18 months post-drilling.
Sachin Oza, co-CEO of Reabold, stated: "We are thrilled to be further increasing our interest in Rathin as it delivers the upcoming work programme, which would de-risk the West Newton development plans.
"Furthermore, Reabold will also be increasing its exposure to the broader PEDL 183 licence area which, we believe, has significant running room beyond West Newton, and on highly attractive terms."
"The UK budget has provided much-needed fiscal clarity and against this more stable backdrop, we are confident in our ability to progress the West Newton work programme and bring this important UK gas asset to the next stage of development and monetisation.
"As the energy transition in the UK moves forward, the economic, fiscal, energy security and environmental case for using indigenous gas has never been stronger."