‘Significant’ Southern North Sea acreage for Australian firm in UK’s licensing round

ASX-listed Hartshead Resources has received a letter of offer and license documentation for six new licenses covering ten blocks as part of the UK’s oil and gas licensing round awarded by the country’s regulator, the North Sea Transition Authority (NSTA).

According to the Australian firm, three licenses – P2669, P2670, and P2678 – have been formally awarded as part of the third batch of the UK’s 33rd licensing round, while another three, namely P2676, P2679, and P2682, are awaiting execution by the NSTA. Nine blocks across five licenses are situated in the Southern gas basin, while a single license is located in the East Irish Sea.

Chris Lewis, Hartshead CEO, noted: “Hartshead is now a significant acreage holder in the Southern North Sea and additionally has a single license and acreage in a new area of interest, the East Irish Sea. The number and variety of high quality resource opportunities now present in our portfolio is both exciting and encouraging. I look forward to seeing the results of the team’s work on the new portfolio over the coming months and being able to share this with shareholders.” 

Two licenses consisting of three blocks are adjacent to the P2607 license, in which Hartshead holds a 40% stake, following a farm-out deal for a 60% working interest with RockRose Energy. The Australian player plans to redevelop the previously producing Anning and Somerville gas fields situated in the license area in three phases. Late last year, the two firms modified the farm-out agreements to secure funding for Phase 1 costs.

Since they contain discovered hydrocarbons, all six new licenses are said to present re-development, development, and appraisal opportunities. This provides Hartshead with additional net contingent and prospective resources of 1,187 Bcf (2C + 2U). Combined with the existing P2607 license, Hartshead is set to get its hands on 1.5 Tcf of reserves and discovered and yet-to-be-discovered accumulations.

According to the NSTA, the 33rd round, opened in October 2022, attracted 115 bids in total from 76 companies across 257 blocks and part-blocks, resulting in 82 offers to 50 companies. The first batch of 27 awards was handed out in October 2023, followed by a second batch of 24 licenses in February 2024.

The round drew criticism from environmental organizations, which called the awards unlawful for failing to consider the impact of oil spills on marine life. This prompted Ocean Alliance Against Offshore Drilling to file a case challenging the legality of fossil fuel exploration licenses in UK waters at the UK’s High Court in August.

At the same time, Offshore Energies UK (OEUK) is convinced that the new licenses will boost energy security and business confidence across all offshore energy sectors. The trade body believes these licenses could make the UK less reliant on imported gas, which is thought to be more carbon-intensive, thus helping lower the country’s carbon footprint.