Parkmead, an independent oil and gas company, has completed an agreement with XTO UK to acquire a 15% interest in a number of blocks in the North Sea.
The blocks, namely 48/1a, 47/5b and 48/1c, contain the Platypus gas field and the Possum gas prospect.
The firm has been loaned £8m by Tom Cross, executive chairman of the group, to fund the acquisition and for the ongoing development of the assets acquired, including drilling, the company said.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
In a statement the firm said: "This acquisition marks an important step in Parkmead's first stage of its development to become a significant new independent oil and gas company. We know the geotechnical aspects of these blocks intimately and believe they contain the potential for significant upside."
The Platypus gas field has the potential to contain up to 180bn cubic feet of gas in place, while the Possum structure has an estimated resources of approximately 100bn cubic feet of gas in place.
The operator, Dana Petroleum, holds a 45% stake and has secured a rig to drill a well on the Platypus/Possum complex scheduled to start in the first quarter of 2012.
The loan will also be used for funding general working capital and future corporate purposes. It will have a tenor of two years, with an interest rate of 2.5% above the average interest rate that leading banks in London charge when lending to other banks, and it will be secured by a standard floating charge provided by the group.
The share price rose 25.49% to 16p by 13:37.
Act now: First Direct’s £175 switching bonus ending soon
First Direct has launched a £12,500 prize draw on top of its £175 cash bonus - but they both finish soon, so you’ll need to be quick
By Vaishali Varu Published
Credit card providers slash 0% balance transfer deals
Customers face a double whammy of rising interest rates and shorter 0% balance transfer periods. We look at what’s going on in the credit card market and why you’ll need to act fast to get the top 0% balance transfer deal
By Ruth Emery Published