Ahead of the first appraisal well being drilled, cored and tested at the beginning of 2020, UK Oil and Gas (UKOG) have announced that they are increasing their interest in the Arreton oil discovery licence to 95%.
A binding heads of terms with Solo Oil Plc has been entered into to acquire their 30% shareholding in the PEDL331 onshore Isle of Wight licence – the licence to drill for oil on a site near Merstone – for £350,000.
The Arreton conventional oil discovery is said to contain 3 stacked Jurassic oil pools with an aggregate gross P50 oil in place of 127 million barrels.
The 30% share is being bought through £90,450 in cash and the issue of 17,989,326 new ordinary shares in UKOG based upon the 5-day volume weighted average price to market close on 10th December 2018 of 1.4428p.
Completion of this acquisition, which will be announced in due course, is conditional upon the usual Oil and Gas Authority consent.
Stephen Sanderson, UKOG’s Chief Executive, commented:
“We are delighted to acquire this further substantial share of the Arreton oil discovery, giving the Company a material 14.9 million barrels of net attributable discovered PEDL331 recoverable resources.
“The first Arreton appraisal well, Arreton-3, is now scheduled to be drilled, cored and tested in the first quarter of 2020, with the drilling of the larger look-alike Arreton South exploration prospect planned to follow after completion of Arreton-3 flow testing. We look forward to starting the journey towards realising the Isle of Wight Licence’s considerable conventional oil resource potential.”
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