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(Alliance News) - Exploration firm United Oil & Gas PLC said Wednesday it proposed to sell two North Sea blocks to Anasuria Hibiscus UK Ltd for USD5 million.
United and Anasuria have agreed non-binding terms which could result in the disposal of blocks 15/18d and 15/19b in the North Sea, which include the Crown Discovery. United was awarded a 95% equity interest in the two blocks by the UK Oil & Gas Authority in August 2018.
The sale terms will see an initial USD1.0 million non-refundable payment from Anasuria. Of this initial payment, United would receive USD950,000 with its minority partner Swift Exploration Ltd getting USD50,000.
Following certain milestones being achieved, a further USD3 million will be paid by the end of 2020. The final USD1 million would be paid once the blocks are in production.
Should all payments be received, United would receive USD4.75 million in total proceeds from the sale. The remainder would be received by minority owner Swift.
In 2018, United generated a GBP810,897 pretax loss. The firm did not report any revenue during 2018.
"Our primary goal as a management team is to deliver value for our shareholders," United Chief Executive Officer Brian Larkin said. "The work of our technical team in attaining and developing this licence has delivered an excellent outcome for the company, allowing us, on completion, to realise a significant return in a very short space of time."
"Our strategy involves the active management of our portfolio of assets, and this transaction demonstrates our ability to deliver on that strategy," Larkin added.
"United remains committed to building a full cycle oil and gas company," Larkin continued. "The proceeds of this transaction will further strengthen our balance sheet to support the growth of the company."
Shares in United Oil were 4.6% higher at 3.87 pence in London on Wednesday.