Energean Oil and Gas has agreed to acquire the entire stake of 50% held by Total in the offshore exploration concession Block 2 in Greece for an undisclosed price.

The UK-based oil and gas company said that the transaction will give it additional material exploration opportunities across its core area of the Eastern Mediterranean Sea with limited financial exposure.

The transaction will also further improve the future growth potential of the company’s portfolio and medium-term optionality to generate value for its stakeholders.

Block 2 is located west of Corfu Island, off the Western Greece coast.

Energean will carry out 1,800km of 2D seismic acquisition and processing in Block 2

Energean, which will also become the operator of the concession, will be responsible for undertaking 1,800km of 2D seismic acquisition and processing at the block as part of its minimum work obligation. The company said that the seismic work may considerably de-risk the prospectivity of the licence.

Energean stated: “Work to date on the licence has identified that Block 2 contains part of a large, potential target comprising of a four-way closure at the Top Jurassic Apulia platform.”

The company further said that the prospect is believed to be an analogue to the Vega field located in Italian waters, where Edison E&P operates with a 60% stake. In July 2019, the company agreed to acquire Edison E&P from Italian energy company Edison for up to $850m.

The structure is said to be covered by sparse 2D seismic which the company said can be de-risked by the seismic campaign which will be acquired as part of the minimum work programme.

The company said that the prospect spans on either side of the Greek and Italian maritime border with nearly 60% of the prospect within the Block 2 license, while the remaining area part is contained in Italian waters.

Edison E&P has a 25% stake in Block 2 and the closing of its acquisition and also that of the deal with Total will give a stake of 75% in the offshore concession to Energean. Both transactions are expected to be completed during the first half of this year.

Hellenic Petroleum owns the remaining 25% stake in Block 2.