As per the deal, Iona Energy will purchase MPX Resources 30% stake and Sorgenia’s 35% and be the operator, increasing its working interest from 35% to 100% in return for meeting their historical costs and future payments from production.

With the transaction, Iona will add a proved plus probable (2P) reserve volume of 7.2 million barrels of oil (MMbbls) of Brent quality crude oil, increasing its Orlando net 2P reserve volume to 11 MMbbls.

Iona will buy 2P reserves at $6.7/bbl of historical development cost including an effective acquisition cost of $4.0/bbl.

An earlier appraisal by Iona found proved (1P) reserves for the oilfield at 6.8 MMbbls, 2P reserves of 11.1 MMbbls, and proved plus probable plus possible (3P) reserves of 16.2 MMbbls.

Iona Energy chief executive officer Neill Carson said the acquisition of our partners’ interests in Orlando makes sense as it will now operate both key developments, Orlando and Kells, to realise operational and portfolio synergies that are offered to the company due to its ownership in these satellite developments.

"A first oil date in 2013 is important to us and Iona is well placed to achieve this through having an advanced FDP, Environmental Statement, pipeline surveys, ownership of critical equipment such as subsea trees, and pipeline procurement contracts," he added.

Iona expects UK’s Department of Energy and Climate Change approval for its final field development plan for the prospect in the third quarter of 2012 with targeted first oil production date of the third quarter of 2013.

Iona stated it will refund Sorgenia and MPX historical costs of the development of the acquired acreage till date worth $48.25m while future staged payments will be for three years beginning from six months after first production, amounting to a total payment of $29m.

The transition assignment is expected to close before 31 December 2012 after DECC approval.