11th Mar 2019 10:49
LONDON (Alliance News) - United Oil & Gas PLC on Monday announced a farm-in option to an onshore licence in Benin.
UOG has signed the deal with Elephant Oil Ltd, which could see it take 20% of the production sharing agreement covering Block B.
UOG will fund USD175,000 of seismic and field studies, with the seismic work targeted for completion in April.
If UOG exercises the option, it will fund 30% of non-drilling costs and 20% of drilling costs, paying USD260,000 up front, and then USD780,000 in three six-monthly instalments.
Chief Executive Brian Larkin said: "We are delighted to take a position in this exciting new opportunity.
"The new licence is a great fit with the United business model, where we are continuing to build a portfolio of near-term low risk assets and a viable producing business based in Europe, with carefully selected frontier exploration licences with transformational upside in South America and Africa."
Block B is located on the Dahomey Embayment, UOG said, covering 1.1 million acres.
The region is a frontier, UOG continued, with no wells ever drilled there, but the licence is surrounded by "prolific" hydrocarbon producing regions.
The only data available for the block is a single seismic line and an airborne gravity gradiometer survey carried out by French geophysical services firm CGG.
Shares were 0.8% lower on Monday at a price of 3.77 pence each.
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