UK Oil & Gas PLC (LON:UKOG) has increased its stake in the Horse Hill project, acquiring interests held by Gunsynd Plc and Primorus Investments.
It adds a total additional stake of 7% in the Horse Hill Developments Ltd vehicle, which in turn owns 65% of the Horse Hill project.
As a result, UKOG’s interest in HHDL increases to 56.9% and the underlying interest in Horse Hill rises to 36.985%. The company is paying a total of £1.92mln, taking a 2% stake in HHDL from Gunsynd and 5% from Primorus. Some £425,000 is payable in cash, with the remainder covered by UKOG shares.
READ: Horse Hill partners boosted as well tests impress
"Although modest in overall size, these acquisitions, the first under the company's new AIM operating company status, are highly strategic in that they deliver to UKOG, the driving force behind the HH-1 Portland and Kimmeridge oil discovery, a majority 56.9% shareholding in HHDL,” said Stephen Sanderson, UKOG chief executive.
“Importantly, the resultant 36.985% beneficial licence interest also makes UKOG the largest single party in the HH-1 discovery and licences.
“In cooperation with the remaining co-venturers, the company can now effectively steer the project directly towards planned permanent production and potentially significant cash flow in 2019.”
He added: “These acquisitions are also fully in line with UKOG's strategy of increasing its working interests in key assets to gain effective control and operatorship."
UKOG also noted the “very positive” initial results of ongoing production testing at Horse Hill where short-term high rate tests achieving stable implied daily pumped rates in excess of 400 barrels of oil per day from the conventional Portland reservoir.
Subsequent test phases will produce crude from the deeper Kimmeridge oil pools.