MetalNRG PLC (LON:MNRG) said its subsidiary joint venture, BritNRG, has signed a sale and purchase agreement to acquire Sunswept Enterprises, an oil and gas firm with a licence portfolio focused in Lincolnshire, UK.

Sunswept’s portfolio includes three producing licences and three exploration permits in the English county. The producing assets are the Whisby field, the Reepham field and the Newton on Trent Field, while the company’s subsidiaries have interests in three UK onshore licences.

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MetalNRG said the acquisition will allow BritNRG to apply modern seismic surveys, geophysical analysis and advanced reservoir study methods not used by the current operator, which it said “may lead to further development and appraisal opportunities”.

Following the acquisition, Sunswept is expected to be “net cashflow positive”, with the gross transaction cost expected to be £1.9mln, although the net purchase price falls to £150,000 after settlement of a director loan and associated corporation tax consolidation, a price which MetalNRG said is “a very low entry to an onshore oil and gas producing asset”.

“Under the view of current revenues and reserves/production forecasts, the fair business value post-completion is expected to be significantly higher than the net purchase price also in consideration of the new working capital investment of £750,000, which taken all together represent a compelling growth opportunity for MetalNRG shareholders”, the firm added.

MetalNRG also said it will invest £475,000 into BritNRG through a convertible loan note which will be funded through existing cash resources.

“I am pleased to be able to report our progress on our first energy transaction and look forward to updating the market on the operational progress that BritNRG will make over the coming months. This is a first step for us in the energy sector and we look forward to developing BritNRG together with the private investors”, MetalNRG chief executive Rolf Gerritsen said in a statement.

Shares in MetalNRG jumped 15.4% to 0.8p in late-afternoon trading on Friday.