London-listed Pennpetro Energy Plc has signed Heads of Terms to acquire 100% of the Limnytskyi oil and gas exploration license in western Ukraine, the independent oil and gas firm said on Wednesday.
The license is located in the Carpathian basin in the far west of Ukraine near the border with the EU. The license has seen more than 100 oil and gas fields discovered to date, Pennpetro Energy said.
The license is an “underexplored large-scale and highly prospective opportunity and expected, once developed, to be a significant addition to the energy independence and sovereignty of Ukraine,” the company said.
Pennpetro will acquire the license through a newly incorporated Polish Holding Company.
The proposed acquisition of the license in Ukraine remains subject, among other things, to completion of legal and financial due diligence, regulatory approvals, and the execution of a definitive share sale and purchase agreement by Pennpetro with the shareholders of the newly-incorporated Polish company.
Pennpetro has identified several promising prospects, following an in-depth analysis of recently acquired 2D seismic data studied by the company, and incorporating Soviet-era well data.
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The company intends to immediately re-enter one previously abandoned well (due to a high pressure blow out) and acquire 3D seismic at a pre-determined location before drilling a second well in the near term. The drilling is expected to have a high likelihood of success, Pennpetro reckons.
“Securing the Heads of Terms for the Limnytskyi licence in Ukraine is transformational for our business, it adds a highly exciting asset into our growing portfolio and the opportunity to develop this into a producing field to aid energy independence, sovereignty and security to Ukraine,” said Stephen Lunn, chairman of Pennpetro Energy.
Meanwhile, recent massive Russian attacks on energy infrastructure in the Poltava and Kharkiv regions in Ukraine are estimated to have forced the shutdown of about 60% of the current Ukrainian natural gas production.
By Tsvetana Paraskova for Oilprice.com
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