RE: Excellent news!!28 Apr 2023 10:02
UJO could loan them the cash to get the well drilled ASAP, getting it back when the Shell payments are received.
Given the significant technical analysis that has been completed to date, culminating in the JV partnership agreeing the well path for WN B-2 and the emergence of the Crawberry Hill opportunity, and in line with prudent risk management, Rathlin has decided to reduce its significant working interest position in PEDL 183 with the aim of potentially bringing in an industry partner to participate in drilling on PEDL 183.
Rathlin holds a 66.67% licence interest in and is operator of PEDL 183. Reabold has a ca. 56% economic interest in PEDL 183 via its 16.665% direct licence interest and through its ca. 59% equity ownership of Rathlin. Reabold is sufficiently funded for its 16.665% direct share of the costs for this well with its existing cash resources.
Should Rathlin's efforts to reduce their working interest position not fully meet their objective, Reabold could provide additional funding for Rathlin upon receipt of the second tranche payment from Shell relating to the sale of the Victory asset, which would allow WN B-2 to be drilled at the earliest opportunity, subject to Environment Agency permit approvals and rig availability. The exact timing and amount of the second tranche payment from Shell is currently uncertain, however the second tranche payment will be ca. £9.5 million, assuming the development and production consent for the Victory gas field is secured from the North Sea Transition Authority by 1 December 2023. If consent has not been received by this date, then Reabold expects to receive £5.2 million within 3 business days of this date, with the balancing payment to come at a later consent date. The net proceeds to be received by Reabold would be sufficient to meet Rathlin's share of the drilling costs of WN B-2, leaving Reabold financial flexibility for its capital allocation strategy of balancing portfolio investment with shareholder returns.