The independent oil and gas company I3 Energy (I3E ) confirmed that it has reached a joint operating agreement to farm-out a 25% non-operated working interest in its Serenity project.
On Wednesday, i3 Energy, which has assets and operations in the UK and Canada, said it had “essentially agreed” a joint operating agreement and trust deed that will allow Europa Oil and Gas to acquire a stake in the Serenity oil discovery, a site located in the UK North Sea.
Under the terms of this agreement, Europa will fund a 46.25% paying interest for one appraisal well on Serenity, after which i3 will retain a 75% working interest in the block.
The well cost is estimated to be around £14 million – Europa’s paying interest will be applied up to a capped cost of £15m. Should this figure exceed that mark, the costs will be paid by the companies in proportion to their respective working interests, the company explained.
I3 outlined that the completion of the deal and subsequent transfer of the licence interest to Europa will be subject to several principal conditions including, inter alia, a requirement for Europa to put its paying interest obligation into a third party account ready for transfer.
Approval of the UK Oil and Gas Authority to the creation of the Serenity area of Block 13/23c as a new block of Licence P.2358 will also be required, as is the assignment of an interest.
I3 noted that it will make a further announcement should Europa successfully complete its accelerated book-build and when transaction agreements for the farm-out are executed.
As previously announced, i3 is in discussions with a number of companies looking to acquire an interest in Serenity. The company highlighted that these other discussions remain ongoing and that they may result in farm-out of additional working interests in the New Serenity Block.
Following this farm-out with Europa, i3 Energy will retain a 100% working interest in the remainder of Block 13/23c which contains the Minos High prospect and Liberator discovery.
Commenting on the news, Majid Shafiq, Chief Executive of i3 Energy, told investors:
“i3 is delighted to announce this potential farm-out which on completion will facilitate the drilling of an appraisal well on the Serenity oil field later this year. This well will provide critical information which will help us to delineate the size of this potentially very large discovery and move it towards development. On completion of the farm-in we look forward to welcoming Europa as our joint venture partner and to a fruitful relationship between our two companies.”
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