United Oil & Gas has agreed a farm-in to Corallian Energy’s interests in its southern UK oil and gas assets.
United said on Tuesday that it entered into a farmout agreement with Corallian Energy to acquire an initial 10 percent interest from Corallian in each of three licences held by a 60-40 joint venture between Corallian as operator and Corfe Energy.
The stake in the licenses, both offshore and onshore southern UK, will be financed by paying 13.33 percent of costs associated with the Colter well, planned for Q2 2018.
Also, an option was granted which expires at the end of March. Under the option, United can purchase an additional 10 percent interest in these licenses, on the same terms as the initial farmed interest.
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.
An appraisal well on the Colter structure is planned to be drilled in 2Q 2018 and will cost approximately £7 million ($9.6M) gross. United estimated its share of this to be £933,100.
It is planned to drill this well up-dip of the Sherwood Sandstone discovery made by Well 98/11-3 in 1986. Although this new well will be drilled via an offshore jack-up, potential development is likely to be through the facilities at Wytch Farm via extended reach drilling.
Additionally, United and Corallian have established an area of mutual interest for the area, enabling the partnership to identify and target further opportunities within the same play.
Brian Larkin of United Oil & Gas said: “The Colter prospect is the same play that has been so productive at Wytch Farm, and joins our existing license at Waddocks Cross, PL090, in the United portfolio.
“This, our second cluster of UK licenses 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 the drilling of the well in Q2 2018.
“We continue to evaluate further acquisitions and farm-in opportunities to grow our portfolio and deliver value for shareholders.”