Cluff Natural Resources (CLNR) has made a breakthrough in its lengthy pursuit of a farm-out partner to help develop a southern North Sea licence.
The London-listed company has entered into an exclusivity agreement with a “major international oil and gas company” for licence P2252, now called the Pensacola prospect.
Shares were up 12.36% to 2.5p in early trading.
CLNR, founded by North Sea oil pioneer Algy Cluff, also said the Oil and Gas Authority (OGA) had agreed to extend the licence by six months to the end of May.
The extension hinges upon CLNR committing to a seismic and well-work programme.
The OGA has also agreed to push back the expiry deadline by six months on P2248, on the condition that CLNR makes a firm well commitment.
The company is still look for a partner for P2248.
Both licences were due to expire at the end of this month.
CLNR has been searching for a partner for the two licences for a long time. They were awarded in the 28th licensing round and are 100%-owned by CLNR.
The firm said last year that a number of parties had shown “significant interest” in the assets, but in February 2018 admitted the farm-out process was “taking longer than anticipated”.
Graham Swindells, who took over from Mr Cluff as chief executive earlier this year, said: “We are delighted to have selected a highly regarded international oil and gas major as our preferred partner for P2252, which contains the Pensacola prospect.
“This represents a major step forward for the licence and reflects the significant amount of work the team has done to de-risk it.
“We look forward to working closely with the counterparty and updating the market in due course.”
Mr Swindells also thanked the OGA for its support.
Mr Cluff, who retained the chairmanship of the company, which he set up CLNR in 2012, was involved in the discovery of the North Sea Buchan field 40 years ago.
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