Clontarf Energy concludes agreement on its Peruvian exploration blocks

AIM-listed mining company Clontarf Energy has concluded an agreement on its Peruvian oil and gas exploration blocks, an update issued from the company on Wednesday has shown.

AIM-listed mining company Clontarf Energy has concluded an agreement on its Peruvian oil and gas exploration blocks, an update issued from the company on Wednesday has shown.

The company reported that Peru Oil and Gas Exploration(POGEL), an energy investment company, would undertake responsibility to put up performance bonds and conduct contractual work on the exploration and development contracts on Peruvian Blocks 183 and 188.

It said that POGEL would also assume the agreed Peruvian liabilities of Hydrocarbon Exploration, a wholly-owned subsidiary of Clontarf Energy.

POGEL is a strategic investor in Peru and intends to develop thermal power generation, producing electricity from natural gas, Clontarf added.

Under the agreement, Clontarf Energy will convert its interest to an overriding royalty of 3.0% on production from any commercial discovery. The company said that royalty payments would be capped at $5.0m per structure, $10m per block and $20m in total.

David Horgan, of Clontarf Energy, said: "We are delighted to have attracted a strategic investor that recognises the opportunity presented by Peru's large and fast growing gas market. During our work in nearby communities we have experienced power cuts and know that thermal gas-fired power stations offer the best solution to Peru's growing demand for energy.

"POGEL is committed to making quick progress on proving up resources and bringing gas reserves into production. This will benefit all stakeholders, including the local communities, the Peruvian Exchequer, and Clontarf Energy shareholders."

Clontarf Energy's share price was up 6.67% to 2.0p at 11:29 on Wednesday.

MF

Recommended

Share tips of the week – 24 September
Share tips

Share tips of the week – 24 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
24 Sep 2021
Three strong Asian stocks trading at bargain prices
Share tips

Three strong Asian stocks trading at bargain prices

Professional investor Nitin Bajaj of the Fidelity Asian Values investment trust picks three stocks that dominate their industries, earn good returns o…
20 Sep 2021
Why it pays to face up to your investment mistakes
Investment strategy

Why it pays to face up to your investment mistakes

Buying stocks can be a complicated business. But selling stocks can be tricky, too – even if you sell for the right reasons. Max King explains how to …
17 Sep 2021
Share tips of the week – 17 September
Share tips

Share tips of the week – 17 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
17 Sep 2021

Most Popular

A nightmare 1970s scenario for investors is edging closer
Investment strategy

A nightmare 1970s scenario for investors is edging closer

Inflation need not be a worry unless it is driven by labour market shortages. Unfortunately, writes macroeconomist Philip Pilkington, that’s exactly w…
17 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
What really causes inflation? Here’s what prices since 1970 tell us
Inflation

What really causes inflation? Here’s what prices since 1970 tell us

As UK inflation hits 3.2%, Dominic Frisby compares the cost of living 50 years ago with that of today, and explains how debt drives prices higher.
15 Sep 2021