Trap Oil Group PLC : Farm-out of interest in Valleys Licence P.2032

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Trap Oil Group plc

("Trapoil" or the "Company")

Farm-out of interest in Valleys Licence P.2032 to Total E&P UK Limited

Trapoil (AIM: TRAP), the independent oil and gas exploration, appraisal and production company focused on the UK Continental Shelf ("UKCS") region of the North Sea, is pleased to announce that today the Company entered into a Farm-out Agreement (the "Agreement") relating to its equity interest in Licence P.2032 (Blocks 21/8c, 21/9c, 21/10c, 21/14a and 21/15b) ("Valleys") with Total E&P UK Limited ("Total").

The Agreement provides that Total will acquire, from Trapoil, a 30.625 per cent. equity interest in Valleys by funding 43.75 per cent. of Trapoil's current 50 per cent. interest, held via its wholly owned subsidiary, Trap Oil Limited, covering certain costs up to and including the drilling of an exploration well. The licence obligations include, inter alia, the acquisition and reprocessing of 3-D seismic and, subject to the partners electing to exercise the 'drill or drop' option on the licence, the drilling of an exploration well. In the event that Total elects not to exercise the 'drill or drop' option within the six month period prior to the P.2032 licence expiry date in January 2015, subject to certain conditions, Total has agreed to compensate Trapoil for the loss of the potential opportunity.

Following completion of the Agreement, the partners in Valleys will be Norwegian Energy Company UK Limited ("Noreco") with a 50 per cent. equity interest, Total with a 30.625 per cent. equity interest and Trap Oil Limited with a 19.375 per cent. equity interest.

Under the terms of the Agreement, Trapoil has an option (the "Exchange Option") such that, within two months following signature of the Agreement, Trapoil can instead elect to exchange between 10 per cent. and 35 per cent. of its current interest in Valleys for an equivalent equity interest in Licence P.1816 (Block 29/15a)("Scaranish") operated by Total.

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

Mark Groves Gidney, Chief Executive Officer of Trapoil, commented:

"I am pleased that we have concluded this deal with Total which provides us with a cost coverage through to a first exploration well on the Valleys licence (where we are already carried as to 6.25 per cent. by Noreco through to first oil production, pursuant to a pre-existing agreement). The farm-out reflects Trapoil's proven strategy of securing valuable carried interests.On completion, this transaction will reduce the Company's overall currently committed capital expenditure, across all of its licence interests, to approximately £2m.

The option to be involved in the Scaranish prospect offers Trapoil an exciting opportunity to be part of the drilling of a key well in the area. Information gained from drilling this well is likely to be important in unlocking the potential of our nearby Romeo discovery drilled earlier this year."

Enquiries:

Trap Oil Group plc	Mark Groves Gidney, CEO	Tel:  [phone] www.trapoil.com
Strand Hanson Limited	James Harris Matthew Chandler James Spinney	Tel:  [phone]
Mirabaud Securities LLP	Peter Krens	Tel:  [phone]
FirstEnergy Capital LLP	Hugh Sanderson David van Erp	Tel:  [phone]
Cardew Group	Shan Shan Willenbrock Lauren Foster	Tel:  [phone] [e-mail]

**ENDS**

Martin David, Technical Director of the Company, has reviewed and approved the technical information contained in this announcement in his capacity as a qualified person under the AIM rules. Mr David holds a BSc degree in Geology from the University of London and has over 37 years experience in the oil industry.

Notes to editors:

·      The Trapoil Group was created in 2008 by a team of experienced industry executives with a broad range of oil and gas technical, operational and financial expertise and professional skills.

·      Trapoil has developed long term relationships with key oil industry partners and major suppliers and consultants including CGG Services (UK) Limited ("CGG") and Applied Drilling Technology International.

·      The Company utilises a research-led, knowledge-based approach to identify and deliver promising exploration and appraisal opportunities, and to this end has secured extensive long-term access to CGG's state of the art 3D seismic database over the majority of the Central North Sea area on negotiated terms. CGG is a leading pure-play geophysical services and equipment provider.  Access to such 3D seismic data serves to strengthen the Group's ability to create opportunities on both open and held acreage in the UKCS.

This information is provided by RNS

The company news service from the London Stock Exchange

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