London-listed United Oil & Gas has entered into a farm-out agreement with Corallian, a private UK oil and gas exploration company, to acquire an initial 10pc interest from Corallian in three licences held by a joint venture between Corallian and Corfe Energy offshore and onshore in the southern UK.
Under the agreement United will pay 13.33pc, or just under £1m (€1.1m), of the costs associated with the Colter well, which is planned for mid-2018.
These licences are located next to the largest onshore oil field in Europe, Wytch Farm, which has produced in excess of 450 million barrels of oil.
In addition, an option has been granted, which expires at the end of March, under which United can exercise a right to purchase an additional 10pc interest in these licences on the same terms as the initial farmed interest.
Additionally, United and Corallian have established an Area of Mutual Interest (“AMI”) for the area, enabling the partnership to identify and target further opportunities within the same play.
“We are very pleased to announce this deal and AMI agreement with Corallian. The Colter prospect is the same play that has been so productive at Wytch Farm, and joins our existing licence at Waddocks Cross, PL090, in the United portfolio,” Brian Larkin, CEO of United Oil & Gas, said.
“This, our second cluster of UK licences and fourth in total, gives United’s shareholders access to a near-term, drill-ready target in a highly prospective region. We look forward to drilling of the well in mid-2018.”
Mr Larkin went on to say that the company continued to evaluate further acquisitions and farm-in opportunities in order to grow the company’s portfolio and deliver value for its shareholders.
In November, United announced that it had farmed into the Tullow Jamaica operated Walton-Morant licence located offshore Jamaica.