Extract Petroleum brought in by Trap to look for oil off Shetland
The Aim-quoted explorer – which bought Aberdeen-based Reach Oil & Gas in 2011 for £30 million – will retain ownership of the blocks being explored, but Extract will be entitled to a royalty fee of 1 per cent of any oil produced from the site.
Trap was awarded the P1938 licence in October by the Department of Energy & Climate Change as part of the 27th licensing round.
The firm will now undertake seismic studies and, if it finds indications of oil, it will bring in partners to drill test wells.
Mark Groves Gidney, chief executive of Trap Oil, said: “This farm-in agreement with Extract plays to our strengths as a technically-led company pursuing innovative initiatives relating to the exploration and extraction of oil from potentially high impact prospects in the UK North Sea.”
Analysts at FoxDavies said: “The company has achieved one of the last obstacles that was preventing the progression of the licences. Now the hard work can begin, starting with the acquisition and interpretation of the seismic data.”