OIL and gas explorer Trap Oil has secured a 33.33% share in the Trent East Terrace Area (TET) from Perenco UK with a view to becoming the operator.
It has committed to securing a drilling rig for licence P685 in the Silverpit Basin in the Southern North Sea within six months.
Trap Oil said it expects its share of the drilling cost will be around £5 million and it will also provide a £700,000 letter of credit to cover its shares of the abandonment liability of the 43/24a-3 well, which was drilled in 1993.
Mark Groves Gidney, chief executive of Trapoil, said: "The farm-in to the TET asset enables the group to secure operatorship, subject to the Department of Energy and Climate Change's approval, and therefore exercise greater control over the scheduling of our work programme.
"In addition, this relatively straight forward gas development project, in conjunction with the promising exploration potential in the adjacent acreage, offers the prospect of attractive cash flow for the group in the medium term."
Last year, Trap Oil acquired a 30% working interest in an adjacent block which is operated by Scottish Gas owner Centrica.
Trap Oil has also applied for further acreage in the area in the latest DECC licensing round.
Trap Oil estimates TET has gross recoverable gas resources of between 35 and 60 billion cubic feet.