Petrogas unveiled as farm-in partner for Cornerstone North Sea assets

Petrogas has revealed itself as the mystery buyer of stakes in a pair of North Sea assets owned by Cornerstone Resources.

The Oman-headquartered operator, through its subsidiary Petrogas North Sea, has farmed-in to the Abbey and Baker prospects in the Southern North Sea.

Plans are now afoot to move forward with the Abbey field, with the partners targeting a final investment decision (FID) by the end of next year.

Cornerstone announced last week that it had found a farm in partner for the licences P2582 and P2433.

The two permits contain the Abbey and Baker exploration prospects respectively.

Following the North Sea Transition Authority’s (NSTA) decision to rubber stamp the deal, Petrogas now has 85% equity in licence P2582 and 70% equity in licence P2433, and is the operator of both.

Usama al Barwani, chief executive of Petrogas, said: “We are delighted to acquire the Abbey field in the UK, and look forward to working with our partner Cornerstone to develop this field in a timely fashion, bringing vital additional domestic gas to the UK market.”

A previously unnamed partner

After certain milestones, post first gas, Cornerstone has the right to increase its share in Abbey to 30%.

The field has audited proven and probable reserves of 111 billion standard cubic feet (bscf) of sales gas and 0.6 million barrels (MMbbl) of condensate.

Meanwhile Baker is part of the low risk Carnaby prospect, a small extension of Abbey.

Peter Young, chief executive of Cornerstone Resources, said: “We are delighted to be bringing in a very high quality and credible partner in Petrogas on both Abbey and Baker. Our teams are already working very closely together and the deep experience of our team is being enhanced by our new partner’s significant experience to the benefit of both projects. This is truly a win win deal for both parties and we are all excited about developing this partnership further.

© Supplied by Cornerstone

“Whilst the priority for Cornerstone will remain the development of Abbey, our broader ambitions are unchanged. We anticipate growing the portfolio both via acquiring new developments and potentially also  producing assets. All our development work is premised on minimising and reducing our environmental footprint and that is a core attribute of Cornerstone. It is inevitable that as we grow our portfolio we will continue to broaden our understanding of renewable energy sources and look to invest in such sources that are complementary to our core business.”

Mr Young boasts a wealth of Southern North Sea knowledge, having founded rival operator IOG (LON: IOG).

He founded Cornerstone in 2017 – Iain McKendrick, former CEO of Ithaca Energy, is on the company’s board.

A growing footprint

For Petrogas, the deal represents a real broadening of its activities in the UK North Sea, where the company only recently completed its first operated well.

Upon completion of the Birgitta East appraisal well in May, the frim pledged to develop the Birgitta gas field “within the next three years”.

Birgitta lies around 125 miles east of Peterhead, with previous estimates from the Geological Society of London putting recoverable reserves at 50-100 billion cubic feet of gas and 3-6 million barrels of condensate.