Tuscan Energy strikes it rich with #10 million

Investee Company – Tuscan Energy (UK)

Investee Company Business Type – Offshore oil operator

Type of Financing – Start-up

Equity Providers – Aberdeen Murray Johnstone Private Equity

Equity Leader (Individual) – Jock Gardiner

Debt Providers – N/A

Debt Type – N/A

Debt Leader (Individual) – N/A

Equity Amount – £10 million

Total Deal Value – £10 million

Other Advisors – KPMG (Corporate finance)

Comments – Tuscan Energy, which has recently been awarded licences to re-develop abandoned North Sea oil fields, has received a £10 million investment from Aberdeen Murray Johnstone Private Equity. The deal represents Aberdeen Murray Johnstone’s biggest ever investment in Scotland.

Tuscan Energy, incorporated in October 2001, has been awarded licences to re-develop UKCS Block 30/24, which contains the old Argyll field. The field was originally opened in 1975 and abandoned by BHP in 1992. With the development in technology such as horizontal drilling through the use of new downhole drilling technology and high angle wells, it is estimated that there are recoverable reserves of 40 million barrels in this block field which, at current oil prices, represents an estimated value of $300 million.

Founded by Dave Workman, Doug Elsby, Ken McHattie, Paul Schofield and Joanne Harris, Tuscan Energy aims to develop other abandoned fields by applying up-to-date technology to deliver significant valued returns. The company has appointed former Shell UK Managing Director, Chris Fay as non-executive Chairman.

Jock Gardiner, head of investment for Aberdeen Murray Johnstone, said: “For a start-up company to be awarded the licences to develop this block of the Argyll field is a huge achievement, reflecting hard work, research and quality of the management team. Credit must go to the Government for awarding the licences to a young, local entrepreneurial company. As well as being our biggest deal to date, our investment in Tuscan Energy underpins our strategy of backing local people at the top of their field who are seeking to grow businesses and create real value.”

Dave Workman, CEO of Tuscan Energy, said: “We at Tuscan hope to start production from the former Argyll area in 2003 drilling in the Argyll field by the end of the year. We are currently establishing our technical and financial credibility and are confident the business will grow rapidly as other opportunities become available in the UK oil production market.”