Edgon Resources is set to explore a number of licences it acquired after striking a deal with the Scottish Power Generation (SPG).
The UK-based company previously entered into a deal which meant it could farm into a number of onshore production licences.
It has since completed its option period.
Egdon had acquired a number of blocks in Lincolnshire and South Yorkshire.
The company had an option period of 12 months before it was required to either advise SPG of its intention to commit or terminate the venture.
During the option period, Egdon undertook a full evaluation of the hydrocarbon potential of the exploration area, reprocessing relevant existing 2D seismic data.
The company will now meet the full cost of the drilling and evaluation of a well in the exploration area to the point of either abandonment or suspension in the case of a discovery.
Egdon will earn a 50% working interest in the exploration area through the drilling of the option well and will become operator of the exploration area.
Mark Abbott, managing director of Egdon, said: “We are very encouraged by the results of our evaluation of PL161 and PL162, both in terms of conventional and unconventional prospectivity, and look forward to working with SPG in exploring these exciting plays. We expect to see a play opening well operated by our partner IGas on neighbouring acreage in H2 2015, which should aid in de-risking the unconventional plays on PL161 and PL162.”
“The exercise of this option is consistent with our strategy of increasing our exposure to shale-gas prospective acreage in our Gainsborough Trough core area.”
The transaction is subject conditions precedent and approval by the Secretary of State for the Department of Energy and Climate Change.
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