UK-based company Cluff Natural Resources (CLNR) has signed an exclusivity agreement for the P2252 license off the UK with a “major” international oil and gas company.
Cluff said on Wednesday that it signed an exclusivity agreement for its 100-percent owned Southern North Sea Gas license P2252.
According to the company, exclusivity is granted to a counterparty subject to a definitive farm-out agreement being entered by January 31, 2019, and completion by February 28, 2019.
Given the exclusivity arrangement, discussions, and negotiations with other potential partners on the P2252 license have been ended, and the P2252 data room closed while the agreement is in place.
Cluff emphasized that, despite the agreement, no assurance could be provided that a commercial transaction would ultimately be concluded with the counterparty.
CLNR’s CEO, Graham Swindells, said: “We are delighted to have selected a highly regarded international oil and gas major as our preferred partner for P2252, which contains the Pensacola Prospect.
“This represents a major step forward for the license and reflects the significant amount of work the team has done to de-risk it. We look forward to working closely with the Counterparty and updating the market in due course.”
The license term itself was extended by the UK Oil and Gas Authority (OGA) by six months with the expiry date pushed back to May 31, 2019. The extension is subject to a seismic and well work program by February 28, 2019.
The P2248 license, awarded in the UK’s 28th Licensing Round like the P2252, was also extended under a six-month initial term extension until May 31, 2019. The license is 100-percent owned by the company.
The extension on the license is extended under the condition of making a firm well commitment by February 28, 2019.
Also, advanced negotiations are ongoing on the license with a preferred bidder on a non-exclusive basis.
The license extension allows the company the opportunity to complete a transaction which could lead to the drilling of one or more wells on the license.
It is worth noting that Cluff was also progressing with the additional six highly prospective licenses recently awarded to the company in the UK’s 30th Offshore Licensing Round which added an estimated 1.9 TCF of prospective resources to the portfolio.
Swindells stated: “The board and I are also very pleased that the initial term of both of these highly prospective licenses is to be extended. With the OGA’s support, we are now able to continue discussions to secure partners in an oil and gas sector with an improved appetite for high impact exploration and an increasingly positive outlook for the North Sea.
“Our immediate focus will now be to complete negotiations with the parties with whom we are in discussion and progress towards agreeing farm-outs while, in tandem, continuing to evaluate the highly prospective licenses awarded to us in the 30th Offshore Licensing Round,” Swindells added.