Premier Oil (LON:PMO) it setting up a joint venture with Antrim Energy (LON:AEY, TSX:AEN) to jointly study options for the Fyne Area in the UK Central North Sea.
Under the terms of the agreement, Premier will have the option to acquire a 39.9% interest in Block 21/28a containing the Fyne field in return for payment of up to US$50 million towards the pre-development and development costs of Fyne.
The block was assigned proved plus probable reserves of 23.3 million barrels of oil by engineering consultants McDaniel & Associates in a December 2009 reserve report.
This US$50 million inlude an immediate US$2 million payment and may include the drilling of an appraisal well on the Eastern part of the Fyne structure.
Premier will also hold the option to participate at a working interest of 50% alongside Antrim in a planned drilling programme in the Greater Fyne area, currently scheduled for Q2 2011.
Antrim currently holds a 75% working interest in Block 21/28a and a 100% working interest in three adjacent blocks in the Greater Fyne area.
Premier Oil stated that the agreement was in line with its strategy of “utilising our financial and operating strengths to build our portfolio in our core areas of activity”.