The agreement covers Elixir’s block 211/22b that hosts the large Upper and Middle Jurassic Jaguar prospect.

If hydrocarbon-bearing, the block could contain reserves of several hundred millions barrels of oil, Elixir said.

Elixir, which has London and Perth offices, said it was pleased with partnering a company of DNO’s calibre at Jaguar.

The Norwegian group will get a 60% interest in the block by funding 92.5% of the costs of drilling an exploration well at Jaguar, with Elixir holding the remaining 40%.

Drilling of a well is expected during the first half of 2006.

DNO focuses its independent oil and gas work in northern Europe, the Middle East and Africa and has current net production of 14,000 barrels of oil equivalent per day.

A reserves base of 75 million barrels is sourced from producing fields in Norway and Yemen.