London-listed United Oil & Gas (UOG) has entered a no-cost option agreement to farm into offshore Block 49/29c, UK Licence P2264, which contains the Acle prospect.
The Southern North Sea block is 50-50 owned by Swift Exploration and Stelinmatvic Industries, United said on Wednesday.
The Acle prospect is a clear 2.5 square-kilometer four-way dip closure with further fault-bounded upside. Like most fields in the Southern North Sea, the reservoir is located in the Permian Rotliegendes formation, and the Acle structure is located near several significant producing gas fields including Gawain, Davy, Sean, and Boyle, United added.
Acle is a low-risk exploration prospect as a function of its four-way dip closure in a proven hydrocarbon fairway. As such, it has been ascribed a high chance of drilling success.
UOG also stated that, on the exercise of this option agreement, the company would sign a farm-in agreement with Swift and Stelinmatvic and acquire a 24 percent interest in the license, 12 percent from each company.
For the 24 percent interest, United will pay 30 percent of the costs associated with the drilling of the first exploration well. Also, United will pay £20,000 ($28,000) in cash to each partner upon signing the farm-in agreement.
The agreement is exercisable upon a firm commitment being made to drill the well and is valid until the expiry of the license, which will be no earlier than June 30, 2018.
United Oil & Gas managing director, Brian Larkin, said: “This option agreement secures a material equity position in the acreage for our shareholders and we look forward to assisting the joint venture partners in their discussions with other potential license partners and the Oil and Gas Authority.”