As per July's farm-out agreement, Egdon Resources (LON:EDR) is to transfer a 10% interest in block TF38c in the East Midlands to Union Jack Oil (LON:UJO).
Egdon was part of the joint venture (JV) group that was awarded block TF38c in today's 14th Onshore Oil and Gas Licensing Round, and it will accordingly transfer over a 10% stake to Union Jack, as previously agreed.
Egdon, which is the operator of the block located in the Humber Basin, will retain a 65% interest; other partners in the joint venture are Terrain Energy, which has 15%, and Nautical Petroleum, which has 10%.
Block TF38c adjoins the PEDL005(R) prospect, in which Union Jack has a 10% stake, and contains a portion of the Louth prospect in Lincolnshire, in which Union Jack also has a 10% interest.
The Louth prospect is located on the margins of the Humber Basin and is defined on reprocessed 3D seismic data; it is estimated by Egdon Resources to contain stock tank oil initially in place of 5.5 million barrels and gross mean -prospective resources of 1.4 million barrels, with an attractive geological chance of success of 37%.
A well to test this prospect is planned to be drilled in 2016/2017 subject to receipt of planning and other consents.
"We are pleased at the success of Egdon in the licensing round, which has subsequently led to the acquisition of a 10% interest in Block TF38c containing a portion of the highly prospective Louth prospect at no further upfront cost to the company," said David Bramhill, executive chairman of Union Jack Oil.
Shares in Union Jack Oil rose 5% to 0.147p on the news.