LONDON (Alliance News) - Cluff Natural Resources PLC on Tuesday said Shell UK Ltd has taken up its option for a 50% stake in one of Cluff's licences.
In February, Cluff agreed the option with Shell, for 50% of the P2437 licence, which contains the 291 billion cubic feet Selene gas prospect.
Shell, part of Royal Dutch Shell PLC, is paying USD600,000 for the interest, and the completion of the farm-in is conditional on the two partners signing a joint operating agreement and getting the thumbs up from the UK Oil & Gas Authority.
Shell will drill an exploration well at Selene as soon as possible, Cluff said, and will pay 75% of work costs up to USD25 million.
Cluff Chief Executive Graham Swindells said: "We are delighted to be able to continue to build on our relationship with Shell in the southern North Sea following confirmation they will now partner with us on Licence P2347, in addition to our existing partnership on Licence P2252, containing the 309 billion cubic feet Pensacola prospect.
"Shell's continuing interest in the company's portfolio of southern North Sea prospects is a testament to our licensing strategy and the ability of our technical team to identify, evaluate and communicate the potential of overlooked opportunities within the UK's mature basins."
"The company now has direct visibility over the future drilling activity of two prospects containing gross resources of around 600 billion cubic feet of gas. Both opportunities have the potential to create significant value for shareholders whilst reducing the overall exploration risk profile through a portfolio approach," Swindells added.
Shares in Cluff were 5.1% higher on Tuesday at a price of 2.60 each.
