Petroceltic International said today it has agreed to buy up to a 40 per cent interest in two permits, which will give exclusive right to explore and produce hydrocarbons in two blocks, BRG 490 (offshore), and Civitaquana (onshore) in Eastern Italy.
BRG 490 is thought to contain as much as 100-300 million barrels of recoverable oil, it said.
Petroceltic agreed to buy an initial 15 per cent interest from Rigo Oil, an independent Italian oil company, with an option to boost its stake to 40 per cent.
Rigo Oil will continue to hold the remainder of the stake over which Petroceltic will hold pre-emption rights.
Under the terms of the agreement, Petroceltic will issue 6 million warrants, which can be converted to ordinary shares in Petroceltic at 9.94 pence, exercisable over a period of three years.
BRG 490 is situated on the Adriatic coast and the onshore block, Civitaquana, is located close by in Italy's Abbruzzi province.