Edinburgh-based Cairn Energy Plc today said that Agora Oil and Gas, a firm it is set to buy, has struck oil in the Norwegian North Sea.
Wildcat well 35/9-7 "found very good quality upper Jurassic reservoir standstone containing light oil over a 168 metres gross interval," the company said in a press statement.
"An estimated preliminary resource range is between 60 and 160 million barrels of recoverable oil," it said. "The discovery is likely to be commercial, and a new 3D seismic acquisition programme over the discovery is already underway."
The Stavanger-based oil company Agora Oil and Gas AS drilled the well on the Skarfjell Prospect in the Norwegian production licence 418. Agora holds 20% interest in the block where Wintershall Norge AS is the operator.
Earlier this month, Cairn had announced $450 million deal to acquire Agora, which is owned by Lord Rothschild's Investment Trust (RIT).
Cairn, which last year sold out a majority stake in its Indian unit to mining group Vedanta Resources, has struggled with exploration in Greenland, where it racked up a $1.19 billion loss in 2011.
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The Agora deal is being seen as hedge against its Greenland risk.
The PL418 licence group comprises Wintershall Norge ASA (45%), Bayerngas Norge AS (20%), Agora (20%) and Edison International Norway Branch (15%).
Due to ongoing rig schedule commitments, the well was not tested but extensive data acquisition and sampling had been carried out, Cairn added.
Svein Ilebekk, Chief Executive of Agora, said the discovery highlighted how important the prospective deal with Cairn could be.
"Cairn's size and strength will help us support the development and production of Skarfjell, should that ultimately prove to be the most attractive way of realising value from this discovery," he said.
Elsewhere, Agora had to abandon its Cladhan South exploration well in the UK North North Sea as it did not yield any hydrocarbon discovery.
"The 210/29c-5 Cladhan South exploration well in the UK Northern North Sea is to be plugged and abandoned," the statement said.
In this block, Agora holds 20% while Sterling Resources (UK) Ltd is the operator with 25% interest. Valiant Exploration Limited has 30% and the balance 25% is with , Wintershall (UK North Sea) Ltd.