ROYAL Dutch Shell has underlined its faith in the exploration potential of the North Sea by buying in to a licence a relative minnow has been working on.

The oil and gas giant has exercised an option to acquire a stake in acreage containing a prospect it is thought could hold 290 billion cubic feet gas from Cluff Natural Resources.

Shell will pay $600,000 for the 50 per cent stake and has agreed to fund 75 per cent of the cost of drilling an exploration well, up to a maximum of $25 million.

The agreement provides a fresh vote of confidence in Cluff Natural Resources on the part of Shell, which in February farmed in to another exploration licence held by the firm.

Read more: North Sea exploration deal coup for oil and gas pioneer

Both deals provided vindication for Algy Cluff’s decision to return to his roots in the North Sea after facing setbacks with his plan to produce gas by burning coal held beneath the Forth.

Mr Cluff, who is chairman of Cluff Natural Resources, felt the gas-rich Southern North Sea had potential some firms had not recognised.

Cluff Natural Resources acquired acreage in the area as other firms slashed spending on North Sea exploration activity in response to the crude price plunge from 2014 to 2016.

Read more: Cluff keen on North Sea after gasification setback

Its chief executive Graham Swindells said: “Shell’s continuing interest in the Company’s portfolio ... is a testament to our licensing strategy and the ability of our technical team to identify, evaluate and communicate the potential of overlooked opportunities within the UK’s mature basins.”

Shell’s chief executive Ben van Beurden said in February that the company was focused on growth in the North Sea after retrenching in response to the crude price plunge.

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Mr Cluff founded the firm that discovered the Buchan field in the North Sea in 1975. Cluff Natural Resources shares closed up 0.07p at 2.55p leaving the firm with a market capitalisation of around £14m.