UK Oil & Gas Investments (UKOG) has agreed to acquire interests in two non-core licences in Southern England from Egdon Resources.

The company will acquire a 7.5% interest in P1916 offshore licence in the Isle of Wight and a 10% interest in Weald Basin PEDL126 licence.

The transaction is subject to the normal regulatory approvals and UKOG is buying the stakes for a nominal consideration of £10,000.

"UKOG is optimistic about the potential of the offshore Isle of Wight licence."

UKOG’s stakes rise to to 72.5% and 60% with the acquisitions in the P1916 and PEDL126 licences respectively.

UKOG chairman David Lenigas said: "UKOG is optimistic about the potential of the offshore Isle of Wight licence, which contains the large drill ready M Prospect, and also about the Markwells Wood-1 oil discovery, which lies immediately adjacent to and within the mapped oil water contact of the producing Horndean oil field in which UKOG has a participating interest."

UKOG had earlier indicated in P1916 licence that it is investigating the possibility that early oil-mature Kimmeridge Clay hot shales might have directly charged interbedded Kimmeridge limestones.

The company said it is analogous to the Kimmeridge Bay and Balcombe fields, and as interpreted from the preliminary results of the recent Horse Hill-1 well in which UKOG has a stake.

UKOG has applied for the onshore acreage adjacent to P1916 in the UK 14th Landward Licencing Round.