Exploiting an exploration license at a proven but undervalued UK onshore gas field where clear sources of revenue generation will provide significant potential for value creation.
We have provided funding and technical input for appraisal drilling, well testing and reserve verification activities. We have also supported the design, planning and engineering developments required to optimise gas production at the site and to prepare the well for future connection to the UK transmission system.
Moorland is optimising gas production and preparing the well for future connection to the UK transmission system
Background
Moorland Energy Limited was a vehicle created in 2008 to acquire licences to extract hydrocarbons from surveyed and partially delineated discoveries.
The first two exploration licenses acquired from Warwick Energy were for an extension to the Wykeham gas field in North Yorkshire and for a producing field at Elswick in Lancashire.
Focus was placed on the Wykeham resource because it has proven reserves and significant potential which is further enhanced by its strategic location close to existing facilities and, most importantly, to the National Transmission System.
The investment
Epi-V made an initial £10 million investment to finance appraisal drilling which confirmed that the Ebberston South well in North Yorkshire contains significant gas reserves and boasts very low water content and high flow rates.
After confirming the economic viability of future gas production, Epi-V increased its commitment to fund the design, planning and engineering developments required to optimise gas production at the site and to prepare the well for future connection to the UK transmission system.
In order to fully capitalise on the opportunities created by the gas discovery, we've also worked with management to strengthen their team by appointing a highly experienced CEO, Chief Engineer and Non-Executive Chairman, supported by high calibre Non-Executive Directors well known in the industry.
The strategy
Domestic hydrocarbon reserves are becoming attractive strategic assets as they will play an increasingly important role in meeting Europe's energy capacity and security needs.
Gas-fired power is increasingly being viewed as a solution to preventing a shortfall in generation capacity over the coming decade, with industry body Eurogas expecting consumption to double from 123 million tonne oil equivalent (mtoe) in 2005 to 239 mtoe in 2030.
In Moorland Energy, Epi-V has invested in developing low-risk appraisal prospects to ensure that, at completion, we can provide a valuable asset with a strong cash flow base to potential acquirers.
Outcomes
The development of the gas sites is currently in planning and a decision is expected later in 2011.
"Moorland Energy's strategy is to acquire and develop existing assets which are either viewed as non-core by larger companies or not being fully exploited by licence holders.
"The PEDL 120 prospect has significant potential enhanced by its strategic location close to existing facilities and most importantly to the National Transmission System.
"By working with Epi-V we've not only secured the funding required to make the most of these and other opportunities, we've also gained the support of a team which has a huge amount of industry understanding and experience in maximising production."
