London-headquartered Baron Oil said today it had come to an “option agreement” to buy part of the Wick prospect in the Moray Firth.
If Baron exercises its option by February 28, it will pay 20% of the cost of drilling a well on Wick, equivalent to £840,000, plus £6,500 in exchange for 15% of the licence from Corfe Energy.
Drilling is expected to commence in September 2018.
Baron shares were up 44.23% to 0.38p in early trading in London.
Licence operator Corallian Energy estimates Wick could have 250million barrels of oil in place.
Baron chairman Bill Colvin said: “The Wick prospect offers an excellent opportunity to drill a relatively low-risk well this year with significant potential and provides the possibility of early, low cost development.
“Success in the Wick well would provide shareholders with a meaningful uplift in the asset value of the company. We are also in the process of evaluating another near-term drilling opportunity in the UK.”