Irish-owned exploration company United Oil and Gas is planning to begin a farm-out process, aimed at bringing in a partner to help develop a significant licence it holds in the North Sea.
United, which is run by two former Tullow Oil executives, increased the number of prospects it owns in the UK to three when it was awarded the Crown oil discovery in May as part of a UK licensing round.
The Crown discovery could contain up to 16 million barrels of oil, according to most recent estimates.
The company has begun reprocessing work on existing seismic data at Crown. Regarding the farmout process, United has already had informal indications of interest from a number of potential partners. The Irish company owns 95% of the Crown licence.
United has also been boosted by the sale of a stake in a neighbouring UK offshore asset. Caldera Petroleum’s $37.5m stake sale to Hibiscus Petroleum of a nearby licence has boosted the value of the Crown licence to $4.5m (€3.9m) to $20m, with a mid-case valuation at just under $11m, according to estimates.
United was awarded the Crown licence at no cost, earlier this year, based on a commitment to undertake a work programme.
Crown had been United’s primary target in the relevant licensing round and chief executive Brian Larkin said, in May, that the company looked forward to starting a work programme “focused on progressing the Crown discovery towards development”.
Last month United said that it was evaluating a number of potential projects after raising gross proceeds of £3m (€3.4m) in a share placing to fund development work.