The Norweigan group Statoil, in partnership with Shell Ireland, has signed a farm-out agreement on its two licences off Donegal.
The agreement will see Hess Exploration Ireland take a 42% share in the two licences in the Slyne-Erris Basin.
Statoil Exploration (Ireland), will remain as operator of both licences and retain a stake of 39.3%, and Shell will keep its 18.5% stake. The firms said drilling will start in 2008.
John Conroy, General Manager of Statoil Exploration Ireland said: 'We now face into an active work programme which includes acquiring state-of-the-art seismic data later this year and the drilling of an exploration well in early 2008'.
In 2003 Statoil Exploration Ireland capped and abandoned the well on the Cong Prospect, 32 miles northwest of Co Mayo, after no oil or gas was found.
It is understood that the company has spent around £20m on the project.
