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United Oil and Gas reaches farmout agreement with Corallian Energy
London-based oil and gas sector investor United Oil and Gas has entered into a farmout agreement with Corallian Energy to acquire an initial 10% interest from the group in three licenses it held as part of a joint-venture with Corfe Energy.
The agreement would see United pay a total of 13.3% of the costs associated with the planned Colter Well off the coast of Dorset, the license of which was jointly held by Corallion and Corfe, adjacent to the largest onshore oil field in Europe, Wytch Farm.
An appraisal well on the Colter structure was planned to be drilled during the second quarter of the year at an estimated cost of £7m, with United estimating its share to be around £933,100.
United and Corallian also established an area of mutual understanding (AMI) for the area, enabling the partnership to identify and target future opportunities within the same play.
Brian Larkin of United Oil and Gas, said "We are very pleased to announce this deal and AMI agreement with Corallian. The Colter prospect is the same play that has been so productive at Wytch Farm, and joins our existing licence at Waddocks Cross, PL090, in the United portfolio."
"This, our second cluster of UK licences and fourth in total, gives United's shareholders access to a near-term, drill-ready target in a highly prospective region. We look forward to drilling of the well in Q2 2018," he added.
As of 1500 GMT, shares had gained 12.44% to 5.06p.