Cluff Natural Resources has completed the farm-out of Licence P2437 to Shell UK, following the receipt of regulatory approval from the Oil and Gas Authority (OGA).

Following the decision, Shell UK assumed a 50% interest in the North Sea licence.

As a part of the agreement, Shell UK will pay the balance of the $600,000 initial consideration ($300,000).

Cluff will continue to retain the remaining 50% stake in the Licence P2437. It will also act as licence administrator until a well investment decision is made.

Situated 20km from infrastructure associated with Shell-operated Barque gas field, Licence P2437 hosts the Selene Prospect. Imaged by high-quality 3D seismic data, the prospect is estimated to contain a P50 Prospective Resource of 291 BCF (gross).

Shell plans to drill an exploration well on the Selene Prospect, as well as bear 75% of the cost of the programme, up to an aggregate cap of $25m.

Cluff chief executive Graham Swindells said: “The UK’s Southern Gas Basin is coming under increased focus currently with several highly material exploration campaigns ongoing around our acreage.

“As such, we are delighted to have formally completed this farm-out agreement with a committed partner such as Shell, to de-risk and ultimately drill the high-impact Selene prospect.”

In February, Cluff and Shell agreed to an exclusive three-month option for Licence P2437. Subsequently, Shell exercised its option in April to farm into the licence.

The initial agreement also involved an acquisition closed in May, involving a 70% stake in Licence P2252.