LONDON (Alliance News) - Shares in Cluff Natural Resources PLC surged on Friday following the company's entry into a farm-out agreement with Shell UK Ltd over two of Cluff's North Sea licences.
Shares in the natural resources company rose by 70% to 4.60 pence on Friday.
For licence P2252, Shell will acquire a 70% working interest and will be appointed as the licence operator, in return for paying all costs related to an agreed forward work programme up to the end of 2020.
This work programme for P2252 involves the shooting of at least 400 square kilometre of new 3D seismic data and sub-surface studies, needed to support a well investment decision before the end of 2020.
P2252 has the Pensacola prospect, estimated to contain mean gas in place of 566 billion cubic feet.
The farm out is conditional on the entering of a joint operating agreement and the obtaining of regulatory consent from the Oil & Gas Authority.
For licence P2437, Shell has the option to acquire a 50% working interest by the end of April for USD600,000 in total.
Should the decision be made to drill an exploration well on the licence, Shell will cover 75% of the costs up to a total of USD25.0 million. Completion of Shell acquisition will be conditional on approval from the OGA.
P2437 has the Selene prospect, estimated to contain mean gas in place of 509 billion cubic feet.
"We are delighted to be able to announce the farm-out of licence P2252 and the terms of an option to farm out licence P2437 with a partner of this standing. This partnership is a clear endorsement of the quality of the licences in our portfolio and demonstrates the Cluff technical team's ability to identify and transform overlooked or less understood opportunities," said Chief Executive Graham Swindells.
"We are particularly excited at the prospect of embarking on our partnership with Shell with both parties sharing a commitment to further development in the Southern North Sea," Swindells added.
