London-listed Trapoil said it has completed a farm-in agreement with Extract Petroleum for acreage in the UK North Sea.

The 1026-square kilometre acreage was awarded to Trapoil in the 27th Seaward licensing round in October and comprises promote licence P1938, which covers 13 blocks.

Under the agreement, Trapoil will become the operator of the blocks and farm-in for a 100% working interest while Extract will retain a 1% royalty interest over any future production from the acreage.

Trapoil’s obligations in the deal include funding and undertaking a preliminary evaluation of the potential for production from tight reservoirs in P 1938.

The company said this assessment would be based on the acquisition of 2D and 3D seismic data.

In the event of encouraging results, Trapoil planned to secure partners to further develop the licence with the ultimate objective of drilling one or more proof-of-concept wells.

“Trapoil would seek to achieve a carried interest in the initial drilling effort in return for its upfront work in developing the prospects to a drill-ready stage,” the company said in a statement.

The transaction is subject to approval by the Department of Energy and Climate Change.