RRE.L Share News (RRE)

(Sharecast News) - Independent oil and gas production company RockRose Energy has signed a sales and purchase agreement to acquire 100% of the equity of Speedwell Energy, it announced on Tuesday, which holds a 100% interest in the Cotton gas field in the UK Southern North Sea.
The London-listed firm said the agreement carried a "limited initial consideration", with the larger part of the consideration becoming due at the date of its final investment decision.

It said the field was discovered in 2009 by well 43/21b-5Z, which encountered a gas column of up to 1,260 feet over six gas bearing sandstone units.

Speedwell estimated that Cotton contained recoverable gas resources of 97 billion cubic feet, or 16.7 million barrels of oil equivalent, and ahd the potential to produce at a peak rate of up to 70 million standard cubic feet per day from two horizontal development wells.

A draft field development plan had been prepared by Speedwell for submission to the Oil & Gas Authority.

Key contractors had been identified, and engagement with both of them and the owners of the export infrastructure expected to be used was said to be ongoing.

Before taking the final investment decision, RockRose said it would carry out further studies to ensure that both the subsurface delivery and the project economics were robust, particularly given the current, "challenging" gas price.

The Cotton field lies 100 kilometres east of Scarborough, between the Kilmar and Garrow fields in both of which RockRose holds a 15% interest.

"This acquisition gives RockRose the option of a significant amount of production and reserves in an area of the Southern North Sea Gas Basin in which we already have other producing assets," said executive chairman Andrew Austin.

"We look forward to carrying out further evaluation of the discovery prior to committing to [the] final investment decision."

At 1434 GMT, shares in RockRose Energy were up 3.02% at 1,875p.