Friday 31 May 2019

Cluff Natural Resources Plc, the AIM quoted natural resources investing company with a high impact exploration and appraisal portfolio focused on the Southern and Central North Sea, announced that it has received Oil and Gas Authority (or ‘OGA’) approval in relation to the Farm-out of Licence P2252 to Shell U.K. Ltd and that the farm out has now completed.

P2252 – Farm-out Highlights

- Following receipt of OGA approval and signing of the Joint Operating Agreement, Shell have been assigned a 70 per cent. working interest in Licence P2252 and

appointed as Licence Operator. Cluff retains a 30 per cent. non-operated interest in Licence P2252.

- Shell will pay 100 per cent. of the costs of an agreed forward work programme to the earlier of 31 December 2020 or the date on which a well investment decision is made.

- The agreed work programme includes the acquisition of not less than 400km2 of new broadband 3D seismic data over the Pensacola prospect in the summer of 2019, subsequent processing of new and existing seismic data and sub-surface studies required to support a well investment decision before the end of 2020.

- Shell have confirmed that they have contracted Shearwater GeoServices to undertake the 3D seismic survey using Shearwater’s proprietary FlexiSource technology with acquisition currently scheduled to commence in mid-August 2019.

- The OGA have approved an extension of the initial term of licence P2252 until 30 November 2022, subject to the contingent well commitment becoming a firm well commitment on or before 30 November 2020.

- All costs in relation to P2252 following the well investment decision (or 31 December 2020, if earlier) will be satisfied by each party in proportion to their working interest.

- P2252 contains the Pensacola prospect which is estimated to contain unaudited mean GIIP of 566 BCF (equivalent to approximately 100 mmboe).

Commenting, Cluff’s Chief Executive Graham Swindells said:

“We are delighted to be able to announce the completion of the farm-out of Licence P2252 to Shell and look forward to the Company’s involvement in the upcoming seismic operations during the summer.

With the option over the Selene prospect also recently exercised, the Company now has direct visibility over the drilling activity on two prospects containing gross P50 Resources of c. 600 BCF of gas. Both opportunities have the potential to create significant value for shareholders whilst reducing the overall exploration risk profile of the Company through a portfolio approach.

We look forward to building our partnership with Shell and successfully developing both the Pensacola and Selene prospects.”