Tuesday 23 July 2019

Talon Petroleum Limited announced that it has been notified by the UK Oil and Gas Authority of its successful joint bid alongside ONE-Dyas E&P Limited for a licence over Block 14/30b (Licence) via the UK 31st Supplementary Offshore Licensing Round.

The joint bid by Talon and ONE-Dyas is part of a broad joint technical assessment of opportunities in the area by the two companies.

Commenting on the new licence award, Talon Managing Director, Matt Worner said: “We are extremely pleased to be adding another highly prospective licence to the Talon portfolio in partnership with ONE-Dyas. The Thelma and Louise Prospects within the block are adjacent to the play identified at Talon’s Skymoos prospect in neighbouring Licence P2363, which is currently the subject of an ongoing farmout process by the Company. We look forward to updating the market when that process is completed.

“The acquisition of an interest in this new licence is a strategic move by the Company to expand and secure Talon’s position in the area, which could be leveraged in the event of successful exploration drilling at Skymoos. Additionally, the Buffalo Prospect is a potentially significant gas prospect.

“We look forward to continuing working with ONE-Dyas to define the best way forward for the Licence as we move to final award by the OGA.”

Upon award, the Licence will be the fifth UK North Sea asset acquired by Talon since the Company embarked on its UK North Sea strategy in mid-2018.

The Licence contains the:

- Thelma Prospect, a Burns Sandstone stratigraphic trap and contains a 29mmbo (gross best estimate) prospective resource

- Louise Prospect, a Piper Fault Block target and which contains a 17mmbo (gross best estimate) prospective resource

- Buffalo Prospect, a Kopervik Sandstone target and which contains a 160Bcf (gross best estimate) prospective resource

Based on normal risking methodology used in the oil and gas industry, an estimated probability of commercial success after all technical work has been completed, is expected to be in the range of:

- 20-25% for both the Thelma and Louise Prospects; and

- 30% for the Buffalo Prospect.

About ONE-Dyas

ONE-Dyas is the largest privately-owned E&P company in the Netherlands. It has a substantial asset portfolio in the North Sea, Gabon and Malaysia which includes both operated and non-operated positions. It holds around 200mmboe of reserves and has a current average production level of some 35,000 boe per day.

In addition to the newly awarded Block 14/30b, Talon’s portfolio now contains:

- 10% participating interest in Licence P2396, which contains the 45mmbo (2C contingent resource) Curlew-A discovery

- 100% participating interest in Licence P2363 which holds the 107mmboe (best estimate) Skymoos prospect

- 100% participating interest in Licence P2392 which holds the 27mmboe (best estimate) Rocket Prospect

- 50% participating interest in recently awarded Blocks 12/26a and 12/27a which holds the 44mmbo (best estimate) Vantage Prospect

(Refer to Talon announcements dated 26 October 2018, 31 January 2019 and 5 June 2019 for further information on contingent resources and prospective resources).

Work program commitments for the initial two-year phase of the Licence are in the order of $A30,000 (gross) and include:

- Poststack processing of 100km2 of existing 3D seismic data

- Geochemistry study