Kinsale Energy, a subsidiary of Malaysian oil company Petronas, has agreed to acquire an 80% interest in the SEL 4/07 Celtic Sea licence, offshore Ireland, from Lansdowne Oil & Gas.
The deal, which is yet to be approved by the Irish Government, will see Kinsale Energy appointed as the operator of the licence.
Kinsale Energy will fund 100% of the well-drilling costs at the Midleton prospect, with Lansdowne’s share of the costs of any testing programme up to $2.5m.
Lansdowne Oil & Gas CEO Steve Boldy said: "We are delighted to welcome Kinsale Energy to Licence 4/07 and look forward to drilling the Midleton gas prospect.
"Securing a farm-in partner for Midleton is a critical first step to delivering our objective of a multi-well programme in the Celtic Sea, which, in addition to exploration wells, we expect to also include further appraisal / pre-development drilling on the Barryroe oil field."
Kinsale Energy has been producing natural gas from its offshore facilities, located 50km south of the Old Head of Kinsale in the Celtic Sea, since 1978.
Lansdowne acreage in the North Celtic Sea Basin includes a 20% stake in the Barryroe field and two exploration Licences, 5/07 (Rosscarbery) and 5/08 (Amergin).
The company said the farm-out process for the other licences is continuing to identify partners for a drilling programme.