UK-based oil and gas exploration and development company United Oil & Gas has signed a farm-out agreement with Corallian, a private oil and gas exploration company, to initially acquire 10% interest in three licenses.
The licenses are owned by a joint venture between Corallian and Corfe Energy. Corallian is the operator with 60% stake, while Corfe Energy holds the remaining stake.
As per the deal, United will pay 13.33% or just under £1m of the costs for the Colter well.
Furthermore, United has an option that would end in March to secure the right to buy an additional 10% interest in these licenses based on the same terms as the initial farmed interest.
The three licenses comprise P1918, which is located offshore southern UK, while PEDL330 and PEDL345 are located onshore.
The offshore license consists of the Colter discovery located next to a large onshore oil field Wytch Farm, which has generated oil surpassing 450 million barrels.
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By GlobalDataAn appraisal well on the Colter discovery is expected to be drilled in the second quarter of this year and will cost around £7m.
United Oil & Gas Brian Larkin said: “We are very pleased to announce this deal and AMI agreement with Corallian. The Colter prospect is the same play that has been so productive at Wytch Farm, and joins our existing license at Waddocks Cross, PL090, in the United portfolio.
“This, our second cluster of UK licences and fourth in total, gives United’s shareholders access to a near-term, drill-ready target in a highly prospective region. We look forward to drilling of the well in Q2 2018.”
This offshore well is expected to be drilled up-dip of the Sherwood Sandstone discovery made through Well 98/11-3 in 1986.
Even though the new offshore well will be drilled via a jack-up, potential development is expected to happen through the facilities at Wytch Farm via extended reach drilling.
United and Corallian have also set up an Area of Mutual Interest for the area, which enables the companies to identify further opportunities within the same area.