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Valiant Petroleum (LON:VPP) today unveiled a deal to buy 12 Norwegian licences for £11.5 million, after tax benefits.
The assets are spread across the North Sea, Mid-Norway and the Barents Sea.
And the portfolio includes a 13 per cent stake in the large Total-operated Norvarg gas discovery, which is currently estimated to contain between 60 and 300 million barrels of oil equivalent.
Additionally, Valiant also reported that the Cladhan South exploration well, in the UK North Sea, has now been spudded by operator Sterling Resources. The company has a 30 per cent stake in the project.
The well is targeting gross prospective resources of around 13 million barrels oil equivalent. Drilling is expected to take 35-40 days.
Meanwhile, Valiant says up to three wells are being planned for next year on the newly acquired Norwegian assets.
“The transaction gives us access to a range of exciting acreage with excellent operators and a meaningful stake in the potentially large Norvarg gas discovery,” said chief executive, Peter Buchanan.
“We look forward to working together with our new partners and further deploying Valiant's expertise on the NCS."
Valiant will initially pay around £6.5 million (NOK60 million) to buy the portfolio of licences from Rocksource ASA, it is also committed to pay exploration costs of £22 million.
The company expects to recoup the majority of those costs through a Norwegian tax refund, with 78 per cent of the costs being reclaimed in the year following the expenditure.
The deal follows the firm’s entry into Norway, through the acquisition of Sagex Petroleum AS last year. And Valiant says the deal grows it presence across a range of acreage and plays. The projects are operated by major companies.
Broker N+1 Brewin said it would look to incorporate the constituents of today’s deal into its NAV in due course but for now retained its 'add' recommendation and 582p price target.
As at 3.45pm, Valiant shares were up 0.48 per cent, at 524.5 pence each.