LONDON – Trapoil has signed an agreement with Caithness Oil and its parent company Caithness Petroleum to exchange equity interests and to vary certain farm-in obligations in the UK North Sea.
Trapoil will gain 35% of Knockinnon, lifting its total working interest to 70%. Caithness will retain a 30% stake, with both companies paying their share of future expenditure.
Knockinnon, discovered in 2000, has estimated recoverable oil of more than 6 MMbbl and could be a near-term development opportunity. Trapoil will assume operatorship. There are currently no work commitments.
In exchange, Caithness will take Trapoil’s 35% equity in Forse, accepting sole responsibility for drilling a commitment well by Dec. 21, 2013.
However, Trapoil will have the right to re-take a 20% stake in Forse within three months of completion of that well. If Caithness does not spud the well by the due date, it will pay Trapoil $7 million or issue this amount in the form of a 12-month loan note secured against all Caithness’ assets.