Statoil to Buy P.2170 License Stake in Quest to Become Active UKCS Explorer

Statoil to Buy P.2170 License Stake in Quest to Become Active UKCS Explorer
Statoil signs an agreement with Jersey Oil and Gas plc and CIECO Exploration and Production (UK) Limited to acquire a 70% ownership and operatorship of the P.2170 license on the UKCS.

Statoil has signed an agreement with Jersey Oil and Gas plc and CIECO Exploration and Production (UK) Limited to acquire 70 percent ownership and operatorship of the P.2170 license on the UK Continental Shelf (UKCS).

The license lies in the Buchan Graben in the Outer Moray Firth region, an area containing the Buchan, Buzzard and Ettrick oil discoveries. Under the deal, Statoil will pay a total cash consideration of $2 million for the asset.

Following the transaction the P.2170 license will be owned by Statoil (operator 70 percent), Jersey Oil and Gas plc (18 percent) and CIECO Exploration and Production (UK) Limited (12 percent).

“This transaction underpins Statoil’s exploration strategy of exploiting prolific basins and deepening in core areas,” said Jez Averty, Statoil’s senior vice president for exploration in Norway and the UK.

“It further strengthens our position on the UKCS and brings a potential impact opportunity in to our portfolio,” he added.

The opportunity presented by the new acquisition looks promising according to Statoil’s Head of UK Exploration, Jenny Morris, who said the company is looking forward to further evaluating the data to assess the feasibility of testing the prospect.

“It adds additional acreage and volume potential to our UK portfolio and we could potentially drill this prospect next year,” said Morris.

Statoil will fund all costs up to $25 million for the first exploration well to be drilled on the P.2170 license, according to FirstEnergy Capital, who stated that the planning of the exploration well is expected to commence this year.

“This is very encouraging for the story and suggests much more materiality to the portfolio than anticipated,” said FirstEnergy in a brief research note sent to Rigzone.

The agreement between Statoil, Jersey and CIECO is subject to approval by the Oil and Gas Authority (OGA). Statoil UK is the operator of the Mariner field in the North Sea, currently under development, and has the ambition to be an active explorer on the UKCS with the belief that considerable hydrocarbon resource remain undiscovered in the area.

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