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(Alliance News) - UK Oil & Gas PLC has taken a controlling stake in the Horse Hill development in Sussex following a GBP12 million deal.
UKOG has purchased Magellan Petroleum UK Investment Holdings Ltd from Tellurian Investments LLC, in both cash and shares. This takes UKOG's stake in Horse Hill to 86% from 51%.
UKOG will pay GBP8 million on completion, with GBP5 million in cash and the rest in shares. Another GBP4 million in deferred payments will be made by the end of March 2020.
UKOG Chief Executive Stephen Sanderson commented: "The completion of this transformational acquisition of a further 35% in our flagship asset means UKOG is now firmly in the driving seat at Horse Hill, holding a controlling 86% interest.
"Our operations team is now poised to commence simultaneous Horse Hill-2/2z Portland drilling and HH-1 Kimmeridge test operations before month's end. The remainder of the year at Horse Hill looks set to be highly eventful and, hopefully, financially transformative, as we drive to seek establishing permanent oil production by year end."
In a separate announcement Wednesday, Horse Hill said Surrey County Council has granted full planning consent for long-term oil production at the field. Permission covers 25 years up to 3,500 barrels of oil a day, from six wells.
Sanderson said: "This landmark milestone, perhaps the most significant event at Horse Hill since the HH-1 oil discovery, paves the way for the company to realise the full value of future long-term production from the Horse Hill oil field, our flagship asset. It is also a key enabler that will help us achieve our goal of long-term oil production and related cash flow by year end."
UKOG shares were 2.0% higher on Wednesday afternoon in London at 1.30 pence each.
The announcements by UKOG were noted by Alba Mineral Resources PLC, which holds 12% of Horse Hill.