UK Oil & Gas plc (LON:UKOG) has acquired Solo Oil’s stake in the Horse Hill prospect located near Gatwick Airport in a bold move to increase their exposure to what has been hailed the biggest UK onshore oil find in years.
Solo Oil and UK Oil & Gas have agreed a deal for Solo’s 15% stake in Horse Hill Developments Ltd.
The deal would make UKOG a majority shareholder in Horse Hill Developments Ltd with a 71.9% stake and a 46.7% interest in the license, giving them the largest beneficial interest in the license.
The deal is to be completed by the issue of shares for a total consideration of £4.5m.
As previously reported by UK Investor Magazine, UKOG are in the process of testing the prospect for flow rates and quality of oil.
CEO Stephen Sanderson said of the acquistion:
“This further strategic acquisition firmly cements UKOG as the dominant player in the Horse Hill Portland and Kimmeridge oil discoveries and Licences. UKOG’s three recent HHDL acquisitions provide a valuable controlling interest and exemplify the rationale behind our recent change of AIM status to an operating company. With the positive Portland test results to date, UKOG, supported by its remaining three coventurers, can now steer the way towards permanent HH oil production in 2019.”
While the move may seem like Solo Oil are retreating from the prospect, the Solo Oil board have said the move is part of a wider strategic plan for the company.
Solo’s Managing Director, Dan Maling, commented:
“The Board has seized the opportunity to monetise its investment in HHDL and is pleased with the return we have made on our investment. The transaction enables a more liquid balance sheet and frees Solo from future direct operational expenditure at Horse Hill, but ensures we retain the exposure to the exciting upside potential of the projects within UKOG’s diverse portfolio. Importantly, we will retain the option to monetise our shares in UKOG at the appropriate time.”
