Valiant Farms Out 70% of Cladhan Interests in North Sea

Valiant Petroleum Plc, the U.K.- based oil explorer, traded 70 percent of its stake in blocks near the Cladhan discovery in the North Sea in three transactions with Sterling Resources Ltd. and BASF SE’s Wintershall unit.

Valiant’s interest in the Cladhan blocks will drop to 30 percent from 100 percent. It will acquire a 40 percent interest in blocks in the central North Sea operated by Sterling.

The deals spread the risk of drilling disappointments or the reward from new finds between the three companies. Cladhan underwent a successful test in September by EnCore Oil Plc in an adjacent field, producing a stable rate of 5,903 barrels of oil a day, and Sterling is seeking a rig for further exploration in the second half of the year.

The move gives “Valiant exposure to a near-term exploration well on this exciting play in its core Northern North Sea area while also expanding its portfolio further,” said Peter Buchanan, Valiant’s chief executive officer. “We look forward to working together with our new partners and benefiting from their extensive knowledge gained in the area from the drilling to date which has taken place on the Cladhan discovery.”

Agora Oil & Gas U.K. Ltd. is another partner in the Cladhan blocks. The deal is subject to regulatory approval.

In an asset swap, Calgary-based Sterling will acquire a 25 percent interest in blocks 210/29c and 210/30b in the northern North Sea, adjacent to two blocks on the southern side of the Cladhan field in which Sterling is the operator, Sterling said in a statement today. In exchange, Valiant receives a 40 percent interest in the central North Sea blocks 21/30f and 22/26c, awarded to Sterling in the U.K. licensing round last year.

“We are glad to be partnered with Valiant in the Central North Sea licenses which contain a number of exploration and appraisal opportunities which both parties are keen to evaluate,” said Sterling CEO Mike Azancot in a separate statement. “We are assessing the possibility of drilling a well in a mapped southern channel later this year on the Blocks acquired through this transaction.”

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