Terrain has sold its 35% interest in the Keddington oil field and 15% interest in the adjacent Louth licence to Union Jack.
During 2019 the Keddington Field produced at a rate of 23 barrels of oil per day which enabled the field to breakeven when the oil price was above $60 per barrel. With Brent Crude slumping to lows of $28 per barrel due to the drop in demand as a result of global COVID-19 lockdowns the licence had become cash consumptive.
A technical review of the field and the surrounding licence suggested that there were some additional reserves which could be produced by further drilling. However, given the disappointing results of the previous well, Terrain considered that the uncertainty was too high to further invest into these assets.
Terrain’s strategy is to focus on optimising its key assets whilst divesting its non-profitable, non-core assets. Terrain sold its interests in Keddignton and Louth (PEDL005(remainder) and PEDL339) to Union Jack for £235,000 (which includes a £35,000 working capital adjustment). Terrain also received its proportion of the abandonment provision in relation to the Keddington well of £70,000 in cash. The effective date of the sale was 30th March 2020.