Knox Energy Solutions AS – Update on reserves in Letter of Intent with Inpector Capital BV
(Oslo, 29 July 2024) Knox Energy Solutions AS (Knox, OSE: KNOX) announces an update related to the oil reserves relevant to stock notice of 25 July at 15:37 (Message ID 624115), due to several requests about this issue. Knox announced that it had signed a Letter of Intent (LOI) with Inpector Capital BV (Inpector).
Inpector is a company jointly owned by Kenzoll Capital and Kenda Capital of the Netherlands.
Knox and Inspector have agreed on a set of main principles for future cooperation and strategy. Knox will be established as the common vehicle for business development and expansion beyond the Scimitar operation in Egypt, by actively growing the company through acquisitions.
In the transaction being envisaged, Knox would acquire a significant minority share of Inpector, the 90% shareholder of Scimitar (scimitaregypt.com), through a combination of shares and cash.
Scimitar is a heavy oil producer in Egypt, and it currently produces about 3,000 barrels of oil per day from the Issaran field. With an increase in the working capital and capex of about USD 12 million, the production can be increased to above 6,000 barrels per day.
The Issaran field has independently certified (McDaniel & Associates, 2023) gross reserves (2P) of 28.9 million bbls and contingent resources (2C) of an additional 14.3 million bbls.
With a STOIIP of 719.2 million bbls and only 26.2 million bbls produced to date, the resource potential is significant, e.g. with an additional 117.6 million bbls to be recovered to reach a recovery factor of 20% (achieved in analogue fields internationally).
Inpector will through the planned transaction become a Knox shareholder and bring major oil company E&P management and technology experience and competence. Knox is already representing senior oil and oil service management experience, in addition to a significant track record in capital markets and corporate transactions.
The plan will be to utilize Knox as a platform for adding existing or near-term production growth. The company will focus on related and adjacent areas, where the combined team has operational experience, starting with North Sea offshore production and significantly underexploited heavy oil onshore Egypt, areas viewed as offering materially undervalued oil and gas resources.
An important part of the future strategy will also be related to consolidating smaller undervalued oil companies through transactions in the capital market, in order to build a larger and more efficient company. Knox and Inpector have started discussions with potential investors regarding a capital raise.
For further information, please contact:
Geir Aune, Chairman, ga@knox-energy.com
Harald B. Hansen, CEO, hh@knox-energy.com
About Knox | knox-energy.com
Knox Energy Solutions AS is an international energy company, with a holding in Rapid Oil Production Ltd. (Rapid), a UK-based oil and gas company backed by a highly experienced board and management team. Knox Energy Solutions AS is listed on Euronext Growth under the ticker KNOX.