Roc Oil to buy stake in North Sea field

Jan. 12, 2005
Roc Oil Ltd., Sydney, said it will acquire a 26% equity interest in Ardmore oil field in the UK North Sea from private British company Acorn Oil & Gas Ltd. Acorn will retain 9%.

Rick Wilkinson
OGJ correspondent

MELBOURNE, Jan. 11 -- Roc Oil Ltd., Sydney, said it will acquire a 26% equity interest in Ardmore oil field in the UK North Sea from private British company Acorn Oil & Gas Ltd. Acorn will retain 9%.

The deal includes Ardmore plus surrounding acreage containing two small abandoned oil fields with redevelopment potential—Dalmore (formerly Duncan) and Innes. Roc Oil also will acquire an interest in the minor, undeveloped oil discovery Iris and several undrilled prospects, all of which have an estimated reserve potential of 60 million bbl of oil.

In a threefold arrangement, Roc has initially agreed to pay £750,000 to acquire 75% of the £15 million secured debt facility provided to Acorn. The second part is an undertaking to provide secured debt to Acorn equivalent to 75% of Acorn's future joint venture cash calls. The third part is the payment of an effective option excise fee equal to as much as £1.9 million if and when Roc converts the loan into a direct equity in the assets.

A development drilling and workover program is under way in Ardmore field.

Ardmore, originally known as Argyll field and operated by Hamilton Bros. Engineering Ltd., was brought on stream in 1975 and produced a total of 73 million bbl of oil before being abandoned in 1992.

It has an estimated 23 million bbl of remaining recoverable oil and was redeveloped as Ardmore field in 2003. Since then it has produced a further 4 million bbl and is currently producing 8,000 b/d. Plans are to increase this to 12,000 b/d by mid-2005.

The field is now operated by private UK company Tuscan Energy (Scotland) Ltd., which has 65% interest.