Independent E&P firm Ithaca Energy has said it has agreed a farm-out deal with Shell UK, reducing its exploration spending commitments in the UK North Sea by $45million.
The deal relates to licence P1792 containing the Beverley prospect exploration and was among assets Ithaca acquired as part of its acquisition of Valiant Petroleum earlier this year.
Ithaca said it was now left with about $30million of remaining UK committed exploration spending, most of which will be on the Handcross well.
Shell will get 20% of Ithaca's 40% share in exchange for a partial carry of Ithaca’s remaining 20% share of the costs of a well on Beverley prospect.
The Beverley prospect lies on the flank of an undrilled salt diapir, analogous with other structures in the area, and is located close to the Shell-operated Gannet fields.
The license also contains the Belinda and Evelyn discoveries.
The farm-out agreement with Shell is subject to normal regulatory consents.
Ithaca also said drilling had started on the Norvarg appraisal well, operated by TOTAL E&P Norge, in PL535 located in the Barents Sea. Ithaca has a 13% interest.
The appraisal well is to prove up the volume potential in the north-eastern segment of the Norvarg closure. Drilling operations (not including testing) are anticipated to last for at least 70 days using the Leiv Eiriksson.