LONDON (Alliance News) - Northcote Energy Ltd said Tuesday it has entered into a pair of transactions at the Shoats Creek field in Louisiana in the US which "will allow for the accelerated development of the field".
Northcote said it has sold a 50% working interest and 36% net revenue interest in the Lutcher Moore-20 well, the right to participate in future wells that target the Frio and Cockfield formations at the site, as well as 25% working interest and 18% net revenue interest in the Wilcox formation to Dallas-based exploration and production company Gulf Coast Western Inc. Northcote said it will be paid USD500,000 in cash in return.
The Lutcher Moore-20 well is the first of Northcote's wells to come into production.
Northcote said in a separate transaction it has also entered into an agreement with its partner at the Shoats Creek site, Shoats Creek Development Inc, to acquire a further stake in the Cockfield formations at the Shoats Creek field site. It said it has purchased 20% working interest and 14.4% net revenue interest in the Cockfield formations for USD67,200, which Northcote said will be funded through the issuance of 80.7 million shares in Northcote at a price of USD0.00083 per share.
Northcote said this restructuring of its relationship with Shoats Creek Development will mean it will save USD30,000 a month in administrative and general costs.
Northcote added it is in discussions with third-party engineering firms on potentially issuing a competent persons report to reflect improvements in the Shoats Creek site since Northcote acquired it.
"Many of the high impact opportunities and initiatives within our portfolio, which provide Northcote with diversified upside and revenue potential, will benefit greatly from these transactions as the company can now contemplate allocating financial and managerial resources to them where we could not while we had responsibility for funding 70% of the capital costs at Shoats Creek Field," Northcote Managing Director Randall Connally said.
Shares in Northcote were down 0.3% at 0.0598 pence on Tuesday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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