Paladin Resources PLC
19 December 2003
PALADIN RESOURCES plc ("the Company")
ENERGY NORTH SEA LIMITED ("ENS")
Alignment of Interests in Acreage Adjacent to
Montrose, Arbroath and Arkwright Fields
Paladin Resources plc and Energy North Sea Limited announce that Paladin Expro
Limited ("Paladin"), a wholly-owned subsidiary of the Company, and ENS have
entered into an exchange agreement to align their interests in a number of
exploration blocks adjacent to the Montrose, Arbroath and Arkwright Fields in
the UK sector of the Central North Sea.
Paladin currently holds a 58.97436 per cent interest in, and operates, the
Montrose, Arbroath, Arkwright and Carnoustie Fields ("the Fields"), with ENS
holding the remaining 41.02564 per cent. These interests will not change as a
result of the exchange agreement.
Adjacent to the Fields, Paladin held a 100 per cent interest in, and operated, a
number of exploration blocks (Blocks 22/17, 22/18, 22/22a and 22/23a non-field
areas), including the Wood gas-condensate discovery (a possible satellite
development to the Montrose Field), and the four blocks awarded to Paladin in
the 21st Licensing Round (Blocks 22/12b, 22/16b, 22/24c and 22/25c).
An exception to this arrangement was that part of Block 22/17 known as the
Cayley Exploration Area, to the west of the Montrose Field, in which Paladin
held a 28.20513 per cent interest and ENS held a 71.79487 per cent interest.
Under the terms of a pre-existing agreement, ENS had the right to earn a 51 per
cent interest in the non-field areas referred to above, in return for funding an
agreed work programme in the Cayley Exploration Area.
Under the exchange agreement, Paladin and ENS have now agreed that their
respective interests in all of the exploration acreage should be the same as
that in the Fields (Paladin 58.97436 per cent and ENS 41.02564 per cent). As
part of this realignment of interests, ENS will fund the first £5 million of
exploration and appraisal expenditure incurred by the joint venture on any of
the acreage and Paladin will assume operatorship of the Cayley Exploration Area.
The exchange of interests is subject to the approval of the UK regulatory
Roy Franklin, Chief Executive of Paladin Resources plc, commented:
"This innovative agreement with a like-minded company paves the way for Paladin
and ENS to maximise value in the Montrose/Arbroath area. By aligning our
respective interests, we have at a stroke removed both potential conflicts of
interest in the use of the existing production facilities and a significant
impediment to early exploitation of the acreage around the existing fields."
Ian Massie, Managing Director of Energy North Sea Limited, said:
"We view alignment of interests as essential to the future success of the
Montrose/Arbroath area and are delighted that Paladin as operator share that
view. We have been impressed by Paladin's approach since taking over from BP as
operator. We look forward to working with them to our and our investors' mutual
UK Energy Minister Stephen Timms added:
"I welcome this announcement by Paladin and ENS and see it as further evidence
of the great benefits still to be had in the North Sea. I am particularly
impressed by the steps taken to align their interests in exploration activity.
Commercial moves like these confirm the commitment and innovation of companies
like Paladin and ENS to ensure that the potential of our oil and gas reserves is
19 December 2003
Paladin Resources plc Tel: 020 7024 4500
Roy A. Franklin, Chief Executive
Cuth McDowell, Finance Director
College Hill Tel: 020 7457 2020
Energy North Sea Limited Tel: 01224 619340
Aquila Financial Tel: 020 7849 3326 / 3319
Patrick d'Ancona / Peter Reilly
This information is provided by RNS
The company news service from the London Stock Exchange