UK Oil & Gas PLC (UKOG) has announced that it has entered into a binding heads of terms with Solo Oil Plc (“Solo”) to acquire their 30% shareholding in the PEDL331 onshore Isle of Wight licence.
Upon completion the Company will hold an operated 95% direct interest in the Licence.
Drilling is expected to begin in early 2020, but will be subject to applications to the Isle of Wight Council.
The acquisition will also correspondingly increase UKOG’s share of the Arreton discovery’s recoverable Contingent Resource volumes by 46%, from 10.2 million barrels to a material 14.9 million barrels UKOG net.
The total consideration of £350,000, with an effective date of 11 December 2018, will be satisfied through the payment of £90,450 in cash and the issue of 17,989,326 new ordinary shares in UKOG (“Consideration Shares”).
Completion of this acquisition, which will be announced in due course, is conditional upon the usual Oil and Gas Authority consent.
Stephen Sanderson, UKOG’s Chief Executive, commented: “We are delighted to acquire this further substantial share of the Arreton oil discovery, giving the Company a material 14.9 million barrels of net attributable discovered PEDL331 recoverable resources. The first Arreton appraisal well, Arreton-3, is now scheduled to be drilled, cored and tested in the first quarter of 2020, with the drilling of the larger look-alike Arreton South exploration prospect planned to follow after completion of Arreton-3 flow testing. We look forward to starting the journey towards realising the Isle of Wight Licence’s considerable conventional oil resource potential.”