Development partner wanted: Hartshead looks to share gas development load
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Hartshead has appointed an energy sector specialist to provide advice on the investment process for industry partnering on its Phase I UK Southern Gas Basin development.
The appointment of LAB Energy Advisors follows growing interest from several industry players in its Anning and Somerville gas fields.
LAB Energy has a strong track record in asset divestments and farm-out transactions globally, including the UK and Dutch sectors of the Southern Gas Basin, and brings a wealth of transaction experience with clients ranging from the oil and gas majors to independent energy players.
It will assist Hartshead Resources (ASX:HHR) launch a process to secure an industry partner for the development stage of the two fields following a final investment decision, which is expected to be completed in early 2023.
It follows the company receiving independent certification of the fields’ proved and probable (2P) reserves, which stand at 301.5 billion cubic feet of gas – about 52 million barrels of oil equivalent.
“The level of interest in Hartshead’s P2607 licence from potentially suitable industry partners affirms our confidence in the value of the asset,” chief executive officer Chris Lewis said.
“With the increased interest in investment into UK gas developments and high gas prices, now is an opportune time to engage with suitable industry partners.”
Russia’s invasion of Ukraine and the weaponisation of its gas exports has sparked growing European interest in domestic gas resources and the UK is no exception to that.
While the UK’s new Windfall Tax is ostensibly aimed at alleviating the cost of living in the UK, by increasing the combined tax rate on oil and gas production by 25% to 65%, the inclusion of an Investment Allowance actually makes new developments more attractive.
That the tax will end automatically on 31 December 2025 due to a sunset clause if it is not ended earlier just makes it that more attractive to develop new projects – especially if production begins after this date.
This article was developed in collaboration with Hartshead Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.