ConocoPhillips has agreed to pay GBP1 million ($1.53 million) for a minority stake in a UK North Sea block holding an oil discovery and gas condensate prospect and may takeover operatorship of the license from Premier Oil, the seller of the stake Trapoil said Friday.
Under the deal, UK-based minnow Trapoil said it has sold its 10% stake in the UK's P1181 license in Block 23/22b which contains the Corrie oil discovery and a gas condensate prospect called Lacewing.
The block is operated by Premier Oil with a 57.5% stake and the BG Group holds the remaining 32.5% interest.
"We have sold to ConocoPhillips in the belief they will become the new operator, and as such have agreed to what we consider to be a fair price and to avoid the substantial and imminent costs we would have otherwise incurred from retaining the paying interest," Trapoil said.
Spokeswomen for Premier and Conoco were not immediately able to comment on the statement.
According to Trapoil's website, Lacewing is analogous with Culzean, a large gas-condensate discovery that is located immediately to the west of the prospect.
Scheduled to be drilled in 2012, Lacewing's high-temperature, high pressure reservoir means the exploration well will be costly at close to GBP40 million, Trapoil said.
"Lacewing is part of our strategic portfolio management...this exploration well is expensive and a successful well is likely to result in several appraisal wells before submission of a field development plan," the company said.
In 2010, Premier estimated that Lacewing could hold up to 135 million barrels of oil equivalent and more recently scheduled an exploration well for the fourth quarter of 2012.
Trapoil said plans to use the funds from the equity sale to continue growing its upstream portfolio through drilling and acquisitions and financing its existing projects.
