Advertisement
Singapore markets closed
  • Straits Times Index

    3,224.01
    -27.70 (-0.85%)
     
  • Nikkei

    40,400.39
    +232.32 (+0.58%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Bitcoin USD

    70,243.34
    +580.88 (+0.83%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • FTSE Bursa Malaysia

    1,541.25
    +10.65 (+0.70%)
     
  • Jakarta Composite Index

    7,288.81
    -21.28 (-0.29%)
     
  • PSE Index

    6,903.53
    +5.36 (+0.08%)
     

Shell Farms-in On North Sea Blocks, Awaits Nod From Regulator

Royal Dutch Shell plc RDS.A signed a farm-in agreement to acquire 70% of U.K.-based Egdon Resources’ P1929 and P2304 licenses, which host the Resolution and Endeavour gas discoveries, respectively, located off Yorkshire in the southern North Sea, U.K. Per the agreement, both companies will work on a mutually acceptable forward work program and timeline to secure license extensions and approval for farm-in from the Oil & Gas Authority (“OGA”) – the U.K. oil regulator.

Discovered by the French giant TOTAL SA TOT in 1966, Resolution discovery contains a mean contingent gas resource of 231 billion cubic feet (bcf). The Endeavour discovery is estimated to have a mean resource of 18 bcf.

About the Agreement

Under the farm-in agreement, Shell will acquire a 70% working interest and will take over the operations of both North Sea licenses, whilst Egdon will retain 30% interest in the licenses. It will pay for the stake by bearing 85% of the acquisition and processing costs of a 3D seismic survey to be carried out on the two targets. The acquisition cost is capped at $5 million, beyond which Shell will stump up 70% of the costs. Shell will also incur all study and manpower costs until the final investment decision on the licenses is reached.

ADVERTISEMENT

In December 2019, Egdon received permission from OGA to extend the licences on both the blocks to the end of May 2020, provided it secures a farm-in agreement by the end of January and demonstrates plans to deliver a new 3D seismic data shoot across both licenses by March. Therefore, the 3D seismic survey is a pre-requisite to obtain OGA’s approval for these highly prospective licenses.

With the acquired stakes in two North Sea licenses held by Cluff Natural Resources last year, Shell continues to leverage on the region’s southern gas basin’s potential. Going forward, it will carry on with its focus on pursuing such deals and offer competence to smaller players such as Egdon Resources.

About Shell

Shell is a global group of energy and petrochemical companies. It is involved in all phases of the petroleum industry from exploration to final processing and delivery. It currently carries a Zacks Rank #3 (Hold). Its earnings beat the Zacks Consensus Estimate by 5.0% on average in the last four quarters.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Some better-ranked stocks from the Zacks Oils and Energy sector are given below:

California Resources Corporation’s CRC earnings beat the Zacks Consensus Estimate in three of the prior four quarters, the average positive surprise being 711.1%. The company has a Zacks Rank #2 (Buy).

CNX Midstream Partners LP’s CNXM earnings beat the Zacks Consensus Estimate in three of the prior four quarters, the average positive surprise being 13.3%. The company has a Zacks Rank #2. .

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.6% per year.


These 7 were selected because of their superior potential for immediate breakout.


See these time-sensitive tickers now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
TOTAL S.A. (TOT) : Free Stock Analysis Report
 
Royal Dutch Shell PLC (RDS.A) : Free Stock Analysis Report
 
California Resources Corporation (CRC) : Free Stock Analysis Report
 
CNX Midstream Partners LP (CNXM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research