---adds share price, broker comment---
It is acquiring the assets for a nominal £1 fee for each project.
Two of the three projects are ‘effectively drill ready’, according to Cluff, which also highlighted that they’re estimated to contain an aggregate of 400mln barrels of recoverable resource potential.
It has signed heads of terms with Verus Petroleum. The deal will initially see Cluff acquire a 5% non-operated interest in the UK Continental Shelf licences P1944 and P2156. Cluff’s stake can be increased to 25% over a nine month period.
These licences host the Fynn and Penny exploration prospects, which are seen below shallow Tertiary sands that have previously found to contain heavy oil.
Additionally, as part of the deal, Cluff has an exclusive option to acquire 25% of Licence P2082 which contains the Skerryvore exploration prospect.
The Skerryvore and Fynn prospects are effectively drill ready, Cluff said, and it expects wells can be drilled within the next 12 to 24 months to take advantage of the lower cost operating environment.
"We are delighted to have been able to take advantage of the current circumstances in the North Sea which have seen a number of very high quality exploration and appraisal assets become available at low or even no cost,” said chairman Algy Cluff.
“These proposed acquisitions complement our existing five licences in the Southern North Sea which demonstrated significant gas potential and represent the first steps to creating a diversified portfolio of exploration and appraisal assets.
“Our objective now is to complete the acquisition process and begin working with our new partners to fully appraise the significant production potential of these exciting assets."
Broker Panmure repeated a 'buy' on the shares and target price of 10p.
It notes that within its valuation for Parkmead (Buy, Target Price 105p) valuation, it has a risked US$5.5m of value for Skerryvore, equivalent to 1.4p per share to Cluff on a pro-rata basis.
Panmure gives no value to Fynn or Penny, whose development, in the event of exploration success, is likely to be also contingent on development of the Perth/Dolphin/Lowlander project, it expects.
Shares added 6.67% on the day to 2p a pop.