North Sea Licences Bought For £1

Published at 11:59AM - 10/05/16

Cluff Natural Resources, has announced the acquisition of stakes in three offshore North Sea oil and gas licences for a mere £1.

Cluff has acquired the stakes from Verus Petroleum, and cover thee traditional oil and gas licences   located in the Central North Sea and the Moray Firth. These licences are operated by The Parkmead Group, the company informed.

“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”, said the company’s chairman, Algy Cluff.

North Sea Licences Bought For £1

Cluff will acquire a 5% non-operated interest in the UK Continental Shelf (UKCS) licences P1944 and P2156 located in the Outer Moray Firth, which contain the Fynn and Penny prospects located below a significant volume of previously discovered heavy oil.

The company has been granted two exclusive options, both of which are exercisable within a period of nine months following the execution of the agreement.

The options allow Cluff to increase its equity position to 25% and to acquire a 25% interest in licence P2082, located in the Central North Sea, where the Skerryvore exploration prospect is located.

The agreement signed means the consideration payable is a mere £1. Upon exercise of an Option, the consideration payable will also be £1 each.

400 Million Barrels

According to estimates by The Parkmead Group, the licences could contain approximately 400 million barrels of potentially recoverable oil.

Meanwhile, two of the licences – Fynn and Skerryvore – are effectively drill ready and it is expected that a well on each prospect could be drilled within the next 24 months to take advantage of the lower operating cost operating environment currently prevailing in the UKCS.

“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”, concluded Algy Cluff.