Elixir Petroleum said yesterday that the Department of Energy and Climate Change had agreed to a four-month extension of the licence term on North Sea block 211/18b.
The company said this would provide it with additional time to complete the farm out of the unfunded portion of the planned Leopard exploration well in the northern sector.
Elixir said the Leopard prospect was one of the largest remaining undrilled oil targets in the North Sea, with a mean prospective resource estimate of about 350million barrels.
Managing director Andrew Ross said: “The granting of an extension is good news and will assist in our efforts to secure a further partner in the short term to assist us with the drilling of the Leopard prospect in 2009.
“We noted with interest the result of the recent Cladhan well drilled in the northern North Sea which also targeted Upper Jurassic sandstones similar to the Leopard prospect.
“It has been reported the Cladhan well discovered a 34-metre (111ft) oil column and that the reservoir has excellent interpreted porosity and permeability.
“We are confident the Cladhan discovery proves the viability of Upper Jurassic plays in the northern North Sea and significantly derisks the Leopard prospect. We believe that the Cladhan discovery, together with the updated studies undertaken by Elixir in the second half of 2008, has further upgraded the Leopard prospect.”
Mr Ross said the financial market crisis and commodity price falls was somewhat of a mixed blessing, adding: “We recognise deals are harder to close, but with companies . . . reducing their drilling activities in the North Sea, rig slots have become available in 2009 and rig rates have fallen significantly.”
Elixir shares closed last night down 3.43% at 1.69p.