OT18350 | PRT: unitisations and re-determinations - work programme - PRT treatment

If, prior to field determination, the increasing interest party agrees to drill a further exploration or appraisal well at his own expense, for the benefit of all the participators in the licence block in return for obtaining a percentage of each existing participator’s interest, then the increasing interest party may claim the costs of that well under Section 5 or 5A OTA, 1975, provided the other conditions of these sections are satisfied.

If the well leads to successful development of the field then, to the extent that costs were not allowed previously under Schedule 7 OTA 1975, LBS Oil & Gas is prepared to accept that disproportionate cost sharing (see OT04420) can apply. As such a Schedule 5 or 6 claim allocating expenditure on the basis of who actually incurred the expenditure, rather than by reference to each participator’s interest in the producing field, will be accepted.