North Sea exploration firm Trap Oil said today that it hoped to start producing in the region by the end of this year.
Trap expects to be one of the most active explorers in the North Sea in the next two years, but said it also wanted to start production at the Lybster field and buy another existing asset on the UK continental shelf (UKCS) – both before 2012.
The company, which raised £60million when it floated on London’s Alternative Investment Market in April, said its first exploration well would be drilled at the Orchid field by the end of the year.
Trap acquired a stake in the Lybster field and six other prospects earlier this year when it took over Reach Oil & Gas from north-east husband-and-wife team Miles Newman and Isabel Davies for £30million. Trap’s acquisition of the Banchory-based company also increased its stake in Orchid from 10% to 15%.
Trap finance director David Kemp said today the addition of Reach’s prospects had more than doubled the London-based company’s portfolio.
“It probably makes us one of the most active explorers in the North Sea,” he said.
“When we did the initial public offering, we promised we would drill seven or eight wells a year and we are well positioned to do that for 2012 and 2013.
“We also wanted to add production and secure cash flow for the company, and we are hoping to deliver that in the second half of this year.”
Mr Kemp said Trap was looking for a production asset in the North Sea, but he added it was too early to say in which price range.
He said: “We have a number of acquisition criteria and have already identified opportunities.
“We are not very interested in fields with PRT (petroleum revenue tax) and we are not interested in fields with large decommissioning liabilities.”
Mr Kemp said the company would consider buying a stake in a single development, but did not rule out acquiring another company.
“It is yet to be decided whether it will be an asset deal or a corporate deal – the most important thing is that we get the right asset,” he said.
Mr Kemp said it would be a challenge for Trap to find the right development however, because the company expected the oil price to remain above $100 a barrel and keep the cost of assets high.
Trap’s interim results for the six months to June 30 were also released today, which revealed the company had pre-tax losses of £1.8million, compared with losses of £385,754 during the same period last year.
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