UK Oil & Gas PLC (AIM: UKOG) has postponed the deadline for its anticipated Horse Hill farm-in agreement with Pennpetro Energy (LON: PPP) to 30 June 2024.
By mid-2024, Pennpetro is slated to join the Horse Hill venture. However, this is contingent on finalizing a formal farm-in contract and obtaining the necessary regulatory approvals.
Currently, UKOG owns 85.635% of Horse Hill and its adjacent license areas. The planned collaboration would result in Pennpetro acquiring a share in the HH-3 well, reducing UKOG’s effective interest to 43.67%, while UKOG maintains its stake in the revenues and production from the HH-1 and HH-2/2z wells.
Stephen Sanderson, CEO of UKOG, stated, “Alongside the ongoing profitability from the HH-1 oil production, which will remain entirely under UKOG’s subsidiaries, this farm-in presents an opportunity for enhanced production and revenue for the company without any capital expenditure.”
Sanderson also highlighted that this agreement would conserve UKOG’s working capital for other major expansion projects, including a hydrogen storage initiative in Dorset.
