EDR.L Regulatory News (EDR)

30 May 2006 07:00

30 May 2006Granby Oil and Gas plc("Granby" or "the Company" or "the Group")Onshore Licence PEDL071 Fraisthorpe Prospect Farm inGranby is pleased to announce that, together with two UK subsidiaries of GasPlus Italiana S.p.A, Gas Plus E & P UK Limited, Gas Plus O & G UK Limited(together "Gas Plus"), it has signed a farm in agreement with Egdon Resourcesplc and Sterling Resources (UK) Ltd to farm into onshore licence PEDL071. Thelicence is split into 3 non-contiguous areas, the largest of which is locatedin the Cleveland Basin close to Bridlington on the Yorkshire coast. There areseveral prospects and leads in the licence, and a well is planned on the`Fraisthorpe' Prospect for later this year or early 2007.Under the farm out arrangements, Granby will earn a 10% interest in thelicence, with Granby's share of the cost of drilling and testing an explorationwell on the Fraisthorpe prospect fully carried by Gas Plus. Gas Plus will earna 35% interest in the licence. Granby will provide Egdon, as licence operator,with some technical assistance for the Licence on behalf of the joint venture.The exploration well will be operated by Egdon and will target a Permian LemanSandstone prospect at a depth of around 1,800 metres on the Fraisthorpeprospect which is located some 7 kilometres to the south of the Caythorpe gasfield which produces from the same formation. A 2D seismic survey was acquiredover the Fraisthorpe prospect in May 2005. A planning application is currentlybeing prepared and, subject to planning approval and any operationalconstraints, the well is anticipated to be drilled in the fourth quarter of2006 or in early 2007.Assignment of the licence interests to Granby and Gas Plus is subject to theapproval of the Secretary of State for Trade & Industry.David Grassick, Managing Director of Granby Oil and Gas, said:"We are delighted with the outcome of this arrangement which gives Granby itsfirst onshore venture, providing early drilling activity on a sizeable gasprospect for no cash outlay."Richard Moreton, Executive Director, said:"This is an area known well to Granby, allowing the Group to contribute itsrelevant technical knowledge. We look forward to working with our new partnersand hope for a very successful future joint venture together."Dr Marco Zanella, Managing Director of Gas Plus, said:"We look forward to working with Egdon and our new partners to participate in awell to test a significant gas exploration prospect in a very interestingonshore area in the UK within a gas producing region of the UK onshore. We arealso delighted to be working with Granby to participate in our second venturetogether in the UK."Participating InterestsFollowing completion of the farmout arrangements and the assignment ofinterests in the licence, the participating interests will be:Company Participating Interest % Granby Enterprises Ltd 10.0 Gas Plus E & P UK Limited 17.5 Gas Plus O & G UK Limited 17.5 Egdon Resources Plc 25.0 Sterling Resources (UK) Ltd 20.0 Sterling Energy Plc 10.0 Total 100.0Enquiries:Granby Oil and Gas 020 7653 3660 David Grassick, Managing Director 07785 921080 Nigel Burton, Finance Director 077 8523 4447 College Hill 020 7457 2020 Ben Brewerton / Nick Elwes Notes to EditorsBackgroundOverview of GranbyGranby Oil and Gas plc (ticker symbol GOIL) is an oil and gas business focusedon exploration in carefully selected areas in the North Sea and elsewhere, andalso on securing production and development opportunities. The Group's strategyis to build a significant portfolio of assets through both discovery andexploitation of oil and gas reserves.The Group was created by the combination of Granby Enterprises and Team Oil,two independent companies formed in 2002 which have had common management teamsand ownership since June 2004. Granby raised ‚£11.5m in 2005, of which ‚£10m wasfrom a placing and Admission to AIM in June 2005.The management team includes six former executives from Enterprise Oil plc, oneof the largest independent companies operating in the North Sea during the1980s and 1990s.Granby's Portfolio and PlansGranby is planning a multi-well exploration programme in the North Sea for 2006and 2007, and is in the advanced stages of farming out several licences awardedin the 22nd and 23rd Rounds to enable this to proceed.The current asset base of Granby comprises interests in 13 UK offshore licencesspanning a total of 23 blocks and part blocks in the Central North Sea, andcontaining multiple prospects generated by the Company. In addition, Granby hasa 9.14% indirect interest in the Galoc field, offshore Philippines, through its15.69% shareholding in the Galoc Production Company which operates the field.First oil production from the field is expected in 2007 at an initial rate ofapproximately 15,000 bopd.Granby recently announced a farm out of North Sea block, 42/28c, to Centricaand Gas Plus Italiana, and a multi-well farm out to Albion Petroleum Ltd.Overview of Gas Plus Italiana SpAGas Plus E & P UK Limited and Gas Plus O & G UK Limited are wholly ownedsubsidiaries of Gas Plus Italiana S.p.A. an Italian independent natural gasCompany within a vertically integrated Group active in the exploration,production, supply, sales and distribution gas business. Gas Plus is the thirdlargest Italian operator in terms of domestic gas production produced from 39concessions, 26 of which as "operator". Gas Plus is a new entrant to the UKwith this second venture having reached agreement in March 2006 to farm-in(together with Centrica) to block 42/28c operated by Granby.ENDGRANBY OIL AND GAS PLC