IGas has entered into a Heads of Agreement (HOA) with Caithness Petroleum Limited (Caithness) to potentially acquire Caithness Oil Limited (Caithness Oil), its UK subsidiary, for a total consideration of £8.95million to be satisfied through the allotment of 7,789,382 IGas ordinary shares.

Under the terms of the HOA, IGas will acquire 100% interests in the licences, located in the northern coastal area of the Inner Moray Firth, in which Caithness has an interest, including the Lybster field, following settlement of obligations, prior to completion, under an existing agreement between the Caithness group and Trap Oil Group plc group of companies.

The Lybster Field was discovered in 1996 by Premier Oil at well 11/24-1 which tested 36 API oil at over 2,000bopd from the Beatrice Formation. The field was put into production in May 2012 and, prior to being temporarily shut-in for a routine workover, was producing approximately 200bopd gross and in excess of 2mscf/d of associated gas. The oil is currently transported and sold to facilities at Nigg.

Tags: Caithness Petroleum Limited, IGas Energy