Regency intends to purchase a ~10% stake in Curzon Energy plc, a UK vehicle controlling two leases (20,000 acres) and five producing methane gas wells near Coos Bay, Oregon in the United States.
Gas assets located in the Pacific Northwest
Intended 10% equity investment in Curzon Energy Plc
Operated by Curzon Energy Plc
Curzon Energy is a UK based company currently finalizing the acquisition of gas assets located in the Pacific Northwest following a bankruptcy situation. The assets are to include 5 existing methane gas wells with significant acreage and development potential. Multiple phases of development are planned.
Phase 1 (18 Months): Reentry and and produce from 5 x existing wells, drill 2 x new wells, add gas compression and water disposal infrastructure, connect to 12in regional pipeline – Midcase resource estimate of 2.75 BCF – Funded by IPO
Phase 2 (36 Months): Up to 58 New Developmental Wells – Midcase resource estimate of 22.4 BCF – Equity and Debt Funded
Phase 3: (< 5 Years): Up to 400 new wells – Funded by Debt
Regency is seeking to make an equity investment in approximately 10% of Curzon (in addition to the shares in lieu of 7% fee as mentioned below) following its planned IPO in early 2017 and looks for Curzon to fund development of the properties via a combination of debt and equity sources.
Regency has to date subscribed for 21,875 shares of Curzon for a total consideration of £175,000 via a pre-IPO funding round. Following final acquisition of the gas assets in the US, Curzon intends to seek a listing on the London market and Regency has agreed to subscribe for a further amount as a keystone investor of the planned IPO and as such ultimately expects to receive a board seat to represent its interests. Regency further expects to receive a 7% fee to be taken in shares of Curzon in consideration of a partial lock-up of its investment for one year.
Gas, widely considered the “fuel of the future”, continues to be the preferred fossil fuel in the United States having risen in 2015 to 33% of US power consumption with steadily increasing demand and relatively low levels of development activity and the Board of Regency considers Curzon an ideal access vehicle to this growth market.