Cluff Natural Resources PLC

Cluff can still ‘phone a friend’ as Halliburton ties are extended

Andrew Nunn, Cluff COO, told Proactive Investors: “it is a really beneficial relationship at this stage and, hopefully, as we move closer to operations we will enter into more formal agreements”.

Halliburton began its association with CLNR last February, before Scotland’s UCG moratorium.

An extension to an arrangement with Halliburton is really beneficial for Cluff Natural Resources (LON:CLNR), says chief operating officer Andrew Nunn.

The arrangement, which is a bit unusual for a small firm to have with one of the world’s largest energy services groups, effectively means CLNR can ‘phone a friend’ to get expertise or insight that would otherwise be out of reach.

“It allows us to use that expertise as a sounding board and a peer review, which is great for a small company because you wouldn’t normally have that resource,” Nunn explained to Proactive Investors.

“So, for us, it is a really beneficial relationship at this stage and, hopefully, as we move closer to operations we will enter into more formal agreements about services and supplies. It is an early stage relationship that we get a lot of benefit from.”

Halliburton began its association with CLNR last February, when the AIM-quoted firm was actively working towards developing underground coal gasification in Scotland.

CLNR estimated its project could have some 1.4 trillion cubic feet of gas that could potentially be accessed by UCG operations, which would extract the gas in-situ and flow it up to surface.

That project has since stalled after the partially-devolved government in Holyrood, run by the Scottish National Party, put a moratorium on the nascent UCG sector.

UCG is a form of unconventional source of hydrocarbons and is distinctly different to shale (which requires fracking) but nevertheless it was brought into Scotland’s existing fracking moratorium.

The moratorium is due to last until mid-2017, at which point the industry could either be ‘re-opened’ or it could be banned in Scotland altogether.

In the meantime, CLNR is committing its resources and cash to conventional offshore gas projects, where it is currently working to analyse the sub-surface ahead of possible drill programmes.

The gas exploration acreage is located close to recent discoveries and existing projects, and to move to drilling CLNR will seek industry partners.

CLNR’s newly extended arrangement with Halliburton secures support for the Southern North Sea gas portfolio, which comprises five licences, as well as its underground coal gasification (UCG) assets.

It shows that Halliburton has a desire to establish areas of collaboration, according to CLNR, and the company highlights that working with Halliburton helps it accelerate ‘the development of knowledge’ and adds capabilities.

In a stock market statement earlier today, CLNR chief executive Algy Cluff said: “We are delighted to be announcing the extension of our MOU with Halliburton for our UK gas and UCG assets and are excited about the prospect of continuing to develop our strategic relationship.

“Halliburton is one of the world's largest providers of products and services to the energy industry and its expertise and capabilities offer our company the opportunity to accelerate the development of our assets.

“The extension for a further two years reflects the strength of the relationship that has been built in the last year and the commitment to develop this strategic relationship further."

Quick facts: Cluff Natural Resources PLC

Price: 1.525 GBX

Market: AIM
Market Cap: £21.44 m


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