Trapoil announces proposed acquisition of Orchid oil discovery

Trap Oil on Monday announced it has put in an offer to acquire a further interest in the licence containing the Orchid oil discovery in the Central North Sea.

The oil and gas exploration company has entered into non-binding heads of terms to potentially buy an additional 45% working interest in Licence P.1556, Block 29/1c from Summit Petroleum for £1.5m in cash.

The proposed acquisition will be subject to approvals from the Department of Energy and Climate Change and the execution of a definitive sale and purchase agreement.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Trap Oil will hold 60% of the licence following the acquisition. Valiant Exploration Limited owns 30% while Atlantic Petroleum UK has a 10% interest.

Mark Groves Gidney, Chief Executive Officer of Trap Oil, said: "I am pleased we have managed to secure this opportunity to potentially increase our existing interest and move this asset forward in the short term. It marks another step towards Trapoil becoming a well-established and recognised operator in the UK North Sea."

Shares were up 0.75% to 16.88p at 11:15 Monday.

RD