Reabold confirms start of appraisal well drilling at West Newton

(Sharecast News) - Reabold Resources announced on Friday that drilling operations had begun at the West Newton A-2 appraisal well, onshore UK.The AIM-traded firm said the drilling would first consist of one well drilling into the Kirkham Abbey Formation gas discovery, de-risking 189 billion cubic feet equivalent contingent resources, before then targeting the deeper Cadeby Formation oil exploration target which had gross prospective resources of 79.1 million barrels of oil equivalent.Pre-drill estimates ascribed a 72% chance of success and a gross net present value of $247m for the Kirkham Abbey Formation discovery, and a 24% chance of success and a gross net present value of $850m for the Cadeby Formation prospect.In a success case, West Newton offered a "fast pathway" to monetisation through its proximity to existing gas pipelines and infrastructure in the local area, the Reabold board explained.It said the A-2 appraisal well would be drilled to a total depth of approximately 2,061 metres below ground level, and was expected to take about 40 days to complete drilling operations.Reabold held a 37.08% interest in Rathlin Energy UK, which is the operator and had a 66.67% equity interest in the UK onshore licence PEDL 183, which contained the West Newton A-1 discovery, drilled by Rathlin in 2014.In 2017, Deloitte prepared a competent person's report for Connaught Oil & Gas, which holds a 35% shareholding in Rathlin, incorporating both the data from the West Newton discovery well, and subsequently acquired 3D seismic data over the field.The company said the Deloitte report assigned contingent resource to the Kirkham Abbey gas formation, and was the source of management volumetric assessments."In our view, West Newton is extremely attractive, due to both its scale and its location," said Reabold Resources co-chief executive officer Stephen Williams."The West Newton A-1 discovery suggests that we may have one of the largest onshore UK gas fields and we are delighted to have been able to fund the appraisal well that can potentially prove up its considerable value."If successful, Williams said West Newton's close proximity to "abundant" infrastructure and demand centres meant it could be an important near-term addition to supplying UK energy demand."With deeper oil potential and a high chance of success, this is an exciting and strategic asset for Reabold and we look forward to updating shareholders on the result of the well in due course."