OTTAWA: The new arrangement has a five year term and comes with an agreed work programme that will restore production. NU-Oil and Gas Plc (LON:NUOG) shares jumped more than 26% after told investors it anticipates a production restart in Newfoundland, Canada. It has signed a production sharing agreement with partner PVF Energy Services Inc which sees the AIM quoted group retain a 50% share of net revenue, once the partner has recovered its costs of performing its obligations. The new arrangement has a five year term and comes with an agreed work programme that will restore production. PVF is funding the work programme and will pay for the ongoing operations.
The programme itself is expected to start in the second quarter once suitable weather conditions arrive and regulatory approvals have been secured. “The company is delighted to execute a full production sharing agreement with PVF,” said Nigel Burton, NU-Oil chief executive. “Not only does the agreement provide new investment with the aim of achieving production and therefore revenue for NU-Oil from the Garden Hill Field, but it also ensures that the company should no longer have any material costs from its Canadian operations.”
