London-listed United Oil & Gas (UOG) has extended an option over the right to buy an additional farmed interest in Corallian Energy’s interests in southern UK oil and gas assets.
In January 2018, United entered into a farm out agreement with Corallian Energy to acquire an initial 10 percent interest from Corallian in each of the three licenses held by a 60-40 joint venture between Corallian as operator and Corfe Energy.
Corallian and Corfe jointly hold equity in license P1918 offshore southern UK and onshore UK licenses PEDL330 and PEDL345. The P1918 license includes the Colter discovery, adjacent to the largest onshore oil field in Europe, Wytch Farm, which has produced more than 450 million barrels of oil.
UOG agreed to farm into the licenses by paying 13.33 percent of the costs associated with the Colter well, planned for the second and third quarters of 2018.
An appraisal well on the Colter structure will cost approximately £7 million ($9.6M) gross with United’s share estimated at £933,100.
Also, an option was granted under which UOG had a right to purchase an additional 10 percent interest in the licenses under the same terms as in the initial agreement.
UOG said on Tuesday that the option expired at the end of March 2018, but was renewed until the end of April 2018.
According to the company, the extension was signed to provide more time to the UK Oil and Gas Authority to transfer the assigned initial interest, which is imminent.
Brian Larkin of United Oil & Gas said: “We look forward to the drilling of the Colter well. This license fits with our European strategy of building a portfolio driven by low risk, near-term activity. We continue to look to build value and the extension of the option on this exciting play is important for our shareholders.”