LONDON (Alliance News) - Cluff Natural Resources PLC on Tuesday said it has signed a sale and purchase agreement and exclusive option agreement with Verus Petroleum (CNS) Ltd and Verus Petroleum (SNS) Ltd in relation to the acquisition of Verus's equity stake in three oil and gas licences.
The licences are located in the Central North Sea and the Moray Firth and are operated by the Parkmead Group PLC.
Under the sale and purchase agreement, Cluff has agreed to acquire a 5% non-operated interest in UKCS licences P1944 and P2156 located in the Outer Moray Firth, which contain the Fynn and Penny prospects.
Under the option agreeement, Cluff has been granted two exclusive options both of which are exercisable within a period of nine months following execution of the sale and purchase agreement.
These options allow Cluff to increase its equity position in licences P1944 and P1256 to 25%, and to acquire a 25% interest in licence P2082 in the Central North Sea, which contains the Skerryvore exploration prospect.
It is estimated that the licences could contain approximately 400 million barrels of potentially recoverable oil, Cluff said.
Cluff added that the Fynn and Skerryvore prospects are effectively drill ready, with a well on each prospect to be drilled within the next two years.
The consideration payable under the sale and purchase agreement is GBP1. Upon exercise of an option, the consideration payable will also be GBP1 each.
"The acquisition of these high quality assets which come with a highly regarded operator in Parkmead, attractive geology, near-term drilling opportunities and nearby infrastructure, provide the ideal cornerstone for building a significant new UK oil and gas company focused on the North Sea," Chairman and Chief Executive Algy Cluff said in a statement.
"We believe the lower cost drilling environment in the North Sea, which we expect to prevail for the foreseeable future, provides us with an excellent opportunity to build and advance a substantial portfolio of exploration and appraisal assets," he added.
Shares in Cluff were trading up 3.0% at 1.21 pence on Tuesday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
