Upland Resources’ boss said yesterday that “the cash is there” for a rig to drill a well in the Moray Firth after picking up investment from a major entertainment corporation.
Tune, co-founded by Malaysian entrepreneur Tony Fernandes, has agreed to invest £1million in the Derbyshire-based company.
The fresh funds will be combined with Upland’s existing reserves, currently about £1.99million, and used to help cover Upland’s financial commitments for the Wick prospect.
Upland chief executive Steve Staley said yesterday that he hoped to be celebrating first oil form prospect in two to three years.
Upland, which also has interests in onshore blocks in the East Midlands, was founded about five years ago and listed on the London exchange in 2015.
Its strategy is to move from relatively low risk, near-term projects to those with more potential, but also slightly more exposure.
Wick ticks all of the boxes. Mr Staley said: “Wick is offshore, yes, but it’s in shallow water, so it’s cheaper. The size of the prize also makes it attractive.”
Upland and licence operator Corallian Energy estimate Wick could have 250million barrels of oil in place.
They are “moving ahead quickly” following the recent agreement for Upland to buy a 40% working interest in the licence from Corallian, a deal which still needs to be approved by the Oil and Gas Authority.
Yesterday, Upland announced that plans for drilling an exploration well on the licence had taken a big step forward with the completion of environmental survey work on the area.
Mr Staley said the survey had been commissioned to investigate subsea conditions on the licence area, including sediment, “a major issue for drilling”.
The update lifted Upland’s shares 14.08% to 2.02p in early trading in London. By 2pm they were 5.92% higher at 1.88p.
The project partners are also on the lookout for a rig to drill the exploration well in the third quarter of this year.
Mr Staley said: “A major step further down the line is to contract a rig to drill the well. The rig will need to be lined up along with the services that go with it.
“We had investment of £1million a few days ago from Tune. That, plus what we’ve got, will be more than enough to drill the well.
“Tune does not invest lightly. They go through a long process, so we’re pleased to have the investment.”
Mr Staley, who studied geophysics at Edinburgh University, was a technical consultant to Cove Energy, and East Africa focused explorer that went from having a market capitalisation of £2million in mid-2009 to being sold to PTTP for £1.2billion in less than three years.
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