TIDMNUOG
RNS Number : 2841B
Nu-Oil and Gas PLC
09 January 2018
09 January 2018
Nu-Oil and Gas plc
('Nu-Oil' or 'the Company')
Aker Solutions sign Agreement with MFDevCo for Provision of
Dutyholder Services and Update on Licensing Option ON 11/1
Nu--Oil is pleased to announce that Marginal Field Development
Company Limited ('MFDevCo'), in which the Company has a 50 per cent
interest, has entered into an agreement with Aker Solutions Limited
('Aker Solutions') for the provision of dutyholder (or
'installation operator') services on MFDevCo's projects. The
dutyholder is appointed by the licensee to manage the operation of
a field. The addition of dutyholder capability is imperative in the
final phases of project due diligence and provides the link with
the operational stage of projects. Prior to project acquisition, it
is important to secure a dutyholder that understands MFDevCo's
operating philosophy and will exercise the strong control of
'through-life' costs that is vital if forecast project economics
are to be maintained.
Key points
-- MFDevCo has entered into an agreement with Aker, with an
initial term of 5 years, under which Aker has the right of first
refusal to provide dutyholder services on MFDevCo projects.
-- The dutyholder role is critical to the operational stage of
projects, providing the strong control of through-life costs that
is vital if forecast project economics are to be maintained.
-- Aker Solutions will invest resources in assisting MFDevCo in
the identification and initial assessment of potential projects,
providing invaluable operational input and third party
verification.
-- Aker Solutions will undertake an 'operations oversight' role
throughout the design and delivery stages of projects on which it
will be dutyholder, to ensure facilities can be operated safely and
effectively and that through-life costs are controlled. These
services will be delivered on a deferred payment basis with costs
recovered from production.
Aker Solutions is one of the world's leading providers of
oilfield products, systems and services to the industry. The
experience and expertise that Aker Solutions brings, in particular
in managing offshore operations across the life of a field,
complements that of MFDevCo and the existing members of the
Consortium and demonstrates the ability to not only deliver but
also operate the projects that MFDevCo secures.
Under the agreement signed, MFDevCo has granted Aker Solutions
the right of first refusal to provide dutyholder services on all
MFDevCo projects; in return, Aker Solutions will invest resources
in assisting MFDevCo in the identification and initial assessment
of potential projects. The investment that Aker Solutions is making
in project evaluation is a major contribution to MFDevCo's project
due diligence and provides third party verification that will be
important to investors and will help MFDevCo finalise project
finance strategies. The dutyholder input also brings an additional
dimension to the 'Suitability Assessments' MFDevCo undertakes for
projects and facilities by providing greater certainty in the
estimation of through-life costs and, again, greater confidence to
potential investors.
In addition to the initial assessment, Aker Solutions will
provide operational input throughout the design and delivery stages
of projects on which it will be dutyholder to ensure that
facilities can be operated safely and effectively, in line with
specified performance criteria and with through-life costs
controlled. Operations oversight services will be delivered on a
deferred payment basis with costs recovered from production.
The initial term of the agreement is five years and both parties
intend it to form the basis for a long term working relationship
with the potential for increasing efficiencies in service provision
and working practices going forward.
The Company continues to work with MFDevCo to conclude
negotiations on a number of marginal field projects.
Alison Pegram, Managing Director of MFDevCo
"Signing this agreement with Aker Solutions is a very
significant step for us, ensuring that we have the support and
expertise required not only to deliver but also to operate our
projects safely and cost-effectively. Aker Solutions' commitment to
innovation and collaboration fits very well with our own philosophy
and that of our Consortium; their reputation and experience will
lend further credibility and give additional confidence to partners
and potential investors at what is an extremely exciting time for
the company."
Craig Wiggins, Senior Vice President of Aker Solutions
"Working with Marginal Field Development Company is an excellent
fit for Aker Solutions in the UK" said SVP Craig Wiggins, who heads
Aker Solutions' production asset services business in the UK. "The
relationship will capitalize on our broad capabilities including
our strength in 'installation operator' services."
Alan Minty, Executive Chairman of Nu-Oil
"I am delighted that MFDevCo has reached this agreement with
Aker Solutions, which secures the support of a world-class
dutyholder for their marginal field projects. This is a significant
step towards completing the team required to develop and,
crucially, to deliver projects efficiently and safely. This news
will reinforce the credibility of the Consortium and help to secure
MFDevCo's first marginal field projects.
"As negotiations to secure the first projects accelerate, I am
looking forward to announcing further news as the various
commercial agreements required are concluded."
Licensing Option ON11/1
In February 2013, the Company submitted an application for an
Exploration Licence over the area covered by Licensing Option
ON11/1 (the 'Licensing Option') in the Clare Basin, onshore
Ireland. The application was suspended pending the outcome of the
Irish Environmental Protection Agency's ('EPA') studies into the
use of hydraulic fracturing which was to be integral to the
development of the area. Following completion of the EPA's report,
hydraulic fracturing has been expressly prohibited from use in the
exploration for and extraction of onshore petroleum hence the
Company's application for an Exploration Licence has been
declined.
The declination of the Exploration Licence application was
expected by the Company and planning for that area was terminated
over 3 years ago. The area covered by the Licensing Option is part
of the Company's legacy assets hence the Company's strategy,
business plan and activities are unaffected by this decision.
Enquiries
Nu-Oil and Gas plc
Simon Bygrave, Investor Tel: +44 (0)161 817 7460
Relations
Nigel Burton, CEO Tel: +44 (0)7785 234 447
Strand Hanson Limited Tel: +44 (0)20 7409 3494
Rory Murphy
Ritchie Balmer
Jack Botros
Beaufort Securities Limited Tel: +44 (0)20 7382 8300
Jon Belliss
Elliot Hance
Note to Editors
The Company
Nu-Oil is a development and production company, which utilises
appropriate development approaches to create value from undeveloped
and mature oil and gas assets. Nu-Oil is building a portfolio of
development and production assets with an emphasis on stranded and
marginal discoveries which can be unlocked using cost-effective
development solutions.
Nu-Oil targets thoroughly appraised fields located in basins
with stable political and regulatory regimes. By doing so Nu-Oil
minimises exposure to the risks associated with frontier plays,
particularly exploration and appraisal risks.
Nu-Oil's 50% owned subsidiary, Marginal Field Development
Company Ltd. ('MFDevCo'), has developed offshore production
solutions that improve the economics of oil projects by
significantly lowering development costs compared to conventional
approaches. To implement its solutions, MFDevCo has established the
Marginal Field Delivery Consortium ('the Consortium'), a group of
leading global engineering specialists who provide the skills and
capability required to deliver projects. Nu-Oil will utilise
MFDevCo solutions and the capability within the Consortium to
develop and deliver its projects.
www.nu-oilandgas.com
Marginal Field Delivery Company
Marginal Field Delivery Company ('MFDevCo') focuses on
maximising recovery from the vast, undeveloped hydrocarbon
resources contained within marginal fields worldwide, utilising
appropriate re-deployable solutions to transform these undervalued
assets. MFDevCo manages the entire lifecycle of marginal field
projects from opportunity screening, suitability assessment and
financing through engineering to production and
decommissioning.
www.mfdevco.com
Aker Solutions Limited
Aker Solutions is a global provider of products, systems and
services to the oil and gas industry. Its engineering, design and
technology bring discoveries into production and maximize recovery.
The company employs approximately 14,000 people in about 20
countries.
www.akersolutions.com
Disclaimer
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
This information is provided by RNS
The company news service from the London Stock Exchange
END
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January 09, 2018 02:00 ET (07:00 GMT)
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