Union Jack Oil PLC (LON:UJO) acquired a royalty interest in revenues generated from three fields in the Central North Sea.
The royalty is a 2.5% interest over 20% of oil and gas revenues produced at the Claymore, Scapa and Piper complex.
Union Jack Oil said it is using its cash resources to buy the income stream for US$130,000 from Cambridge Petroleum Royalties.
AIM-listed Union Jack said the royalty is a cash-generating and high yielding investment with an average annual compound yield estimated at 16.5% over its life.
This is its first royalty investment in the Claymore and Piper Complex. Union Jack said further transactions are planned for 2021 with 'a second, material transaction at an advanced stage'
David Bramhill, Union Jack’s executive chairman, said: "This compelling investment in a cash-generating royalty over the Claymore and Piper Complex's oil and gas revenues, plays strongly to the company's technical and analytical strengths in oil and gas and represents a low-risk entry strategy to the North Sea while generating superior investment returns.
"The royalty provides Union Jack with the benefits of an attractive cash flow stream and high yields from North Sea oil and gas production without the accompanying capital and operating costs associated with direct participation in the underlying oil field developments and infrastructure.”