The work programme will involve the shooting of not less than 400km² of new broadband 3D seismic data. Credit: Philippa McKinlay.

Shell has signed an agreement to acquire Licence P2252 and an exclusive three-month option for Licence P2437 in the North Sea from Cluff Natural Resources.

Under the binding, conditional farm-out agreement, Shell will acquire a 70% stake in Licence P2252 and serve as the operator.

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The company will pay 100% of the costs of an agreed forward work programme to the earlier of 31 December 2020 or the date on which a well investment decision is made.

A 30% non-operated interest will be retained by Cluff in the licence.

The work programme will involve the shooting of no less than 400km² of new broadband 3D seismic data over the Pensacola prospect this year.

Subsequent processing of new and existing seismic data and sub-surface studies will be performed to support a well investment decision before the end of next year.

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“We now have direct visibility over the route to future drilling activity, and the potential to create further significant value for shareholders.”

Cluff Natural Resources chief executive Graham Swindells said: “We are delighted to be able to announce the farm-out of Licence P2252 and the terms of an option to farm out Licence P2437 with a partner of this standing.

“We are particularly excited at the prospect of embarking on our partnership with Shell with both parties sharing a commitment to further development in the Southern North Sea.

“Most importantly, we now have direct visibility over the route to future drilling activity, and the potential to create further significant value for shareholders.”

Simultaneously, Shell has an exclusive three-month option to acquire a 50% stake in the P2437 licence by 30 April from Cluff, which will receive payments totalling $600,000 from Shell.

If the option is exercised, Cluff will retain a 50% working interest and operatorship until a well investment decision is made.

In the event a decision is made to proceed with an exploration well at the licence, Shell would commit to covering 75% of the well costs, up to a total of $25m.

Completions will be conditional upon a joint operating agreement and consent from the Oil & Gas Authority.