Premier Oil said yesterday it was to take a 50% stake in a block in the UK central North Sea containing two prospects.
The company has reached agreement with Serica Energy to “farm in” to gain the equity interest in block 22/19c and also become its operator.
The acreage contains the Oates and Bowers prospects.
Premier estimates the “gross unrisked resource” at Oates to be 25-107million barrels of oil equivalent (boe). The prospect is considered moderate to low risk.
The company added that follow-up potential existed in Bowers, which has a gross resource range of 10-65million boe.
Subject to rig confirmation and a site survey, an Oates exploration well to be funded by Premier will be drilled late in the second or early in the third quarter of this year.
Premier chief executive Simon Lockett said: “Following on from the Oilexco acquisition, Premier is building a new core area in this part of the UK central North Sea, via the Huntington development project and our involvement in the Moth discovery. The Oates prospect is an excellent near-term opportunity to add reserves via organic growth in this new core area.”
Last May, Premier completed the acquisition of Oilexco North Sea out of administration, with the deal valued at £321million after certain adjustments.
Serica is to retain the remaining 50% interest in block 22/19c.
Paul Ellis, chief executive of Serica, said: “I am delighted that we have agreed the farm out of Oates with Premier, as it enables the drilling of an exciting well at no cost to the company.”
Serica also said yesterday it was in the final stages of negotiating a farm out of its Conan prospect in east Irish Sea blocks 113/26b and 113/27c, in which it holds a 100% interest.
Under the terms of this agreement, Serica will farm out a 35% interest in the licence. The unnamed company farming in will contribute 70% of the costs of a well.
Mr Ellis added: “Oates and Conan are prospects of high potential and we look forward to seeing the results of both wells this year.”