Shareholders in Tullow Oil voted in favour of a company resolution to issue some £41.8 million sterling in shares to part-fund the acquisition of UK gas assets worth up to £201 million at an e.g.m in Dublin yesterday.

The deal with UK oil producer BP Amoco is expected to be finalised by late September and would significantly increase cashflow, according to Mr Aidan Heavey, managing director of Tullow Oil.

He said there was a significant upside to the price being paid for the assets and the transaction would unlock some £70 million sterling in cashflow in the first three years.

Successful completion of the deal, which has been named The Trophy Acquisition, would double the size of Tullow Oil which stands to gain 18 offshore licences in 20 North Sea blocks.

Mr Heavey told shareholders there were up to 60 drillable assets in the packages purchase and the company would begin drilling three wells within months of the acquisition.

Cashflow generated from the UK acquisition would enable Tullow Oil to drill six to 12 wells worldwide and the company would remain primarily an exploration company rather than a production company, said Mr Heavey.

He said the assets would provide Tullow with a security of income as 50 per cent of North Sea production was on established long term contracts. The company has appointed new managers to develop a strategy to sell gas on the gas spot market, he added.

The value of the acquisition could be reduced to as little as £80 million if the maximum assets are taken out of the packages through the exercise of pre-emption or equivalent rights by existing owners.

However, Mr Heavey said this was unlikely to happen as he was already aware of some companies who would not exercise these rights.

The purchase price for BP's assets includes some £21 million in deferred payment. Tullow has secured a bank loan facility which could run to £140 million. Shares in Tullow were down 1p at 67 pence sterling yesterday in London.