British oil firm Serica Energy Plc said it would partner with oil major BP to explore an oil prospect off the coast of Namibia.
Serica’s shares were up 11 per cent at 32.5 pence at 0807 GMT, placing them among the top gainers on the London Stock Exchange.
Under the terms of the deal, BP will cover Serica’s past costs and pay for an extensive seismic survey in exchange for a 30 per cent stake. Serica will be left with a 55 per cent interest in the property following the survey.
The exploration blocks cover an area of about 17,400 square kilometres in the deep water central Luderitz Basin, with water depths ranging from 300 metres to 3,000 metres, Serica said in a statement.
“We were awarded the blocks only two months ago and, with BP now participating in the exploration effort, we are able to make a very fast start to what is likely to be a considerable and potentially very rewarding exploration programme,” Serica’s interim Chief Executive Tony Craven Walker said.
Given the high cost of drilling in these depths of water, Serica also granted BP an option to raise its interest in the blocks by covering the full cost of drilling and testing an exploration.