LONDON (ShareCast) - (Sharecast News) - Andalas, the owner of a 25% interest in Eagle Gas, updated the market on that investment on Monday, reporting that the operator - Holywell - was currently negotiating an extension to the initial licence term which ends on 19 December.
Eagle Gas is the 100%-owner of Holywell Resources, which owns a 66.33% interest in licence P2112.

The AIM-traded firm said Holywell was negotiating the extension with the Oil and Gas Authority, on behalf of itself and joint venture partner, Atlantic Petroleum - the owner of the remaining 33.3% non-operated interest in the licence.

Andalas said it would update shareholders on the status of the negotiation as soon as further information was made available.

"Following completion of the 2018 work programme, Holywell provided the results of its seismic interpretation to its partner, Atlantic, and also to its shareholders, including Andalas, which were announced by the company on 20 August," the Andalas board said in its statement.

"Holywell reported to Andalas that Atlantic, having completed a technical evaluation of the seismic reinterpretation completed by Holywell, formed the view that there was the potential for there to be a further upside gas reserve on the licence that may influence the factors that led to the selection of the initial well location that had been recommended by Holywell."

Andalas said the licence partners therefore agreed to request an extension, to ensure that sufficient time was allowed under the licence to enable the joint venture to complete additional seismic interpretation work on the potential upside gas reserve.

"Any additional seismic interpretation will provide additional data to enable the joint venture partners to agree the technical and commercial appraisal and development plans for the licence that will inform the joint venture partners individual decision to drill or drop the licence."

The additional seismic reprocessing could result in the operator, Holywell, issuing an updated resource assessment, Andalas explained.

However, as of Monday, the previously-announced operator assessment of the resource remained unchanged.

"Any update resulting from the proposed additional seismic reprocessing will be announced at that time."

Alongside the request for an extension to the licence, the joint venture partners had continued to evaluate potential funding options with regard to progressing the licence to the drill phase, the Andalas board added.

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