UPDATE 1-Rift Oil signs farm-in deal in Papua New Guinea

* Signs farm-in deal for PPL 235 in Papua New Guinea

* Sees PPL 235 resources of more than 2 trln cubic feet

* Cost of drilling, testing a hole $15 mln-$18 mln

* Shares up 31 pct (Adds details)

May 5 (Reuters) - Rift Oil Plc RIFT.L said on Tuesday it reached an agreement with a multi-national oil company to fund the drilling of up to four wells in Papua New Guinea, sending its shares up 31 percent.

The company, which operates in the UK and Papua New Guinea, did not give terms for the deal for its PPL 235 licence, which is estimated to have a potential of more than 2 trillion cubic feet.

The company said it had retained 100 percent of the rights to the adjoining licence, PPL 261, which it believes to be highly prospective.

The costs of drilling and testing a hole is about $15 million to $18 million, and a partner would help meet the financial, technical and commercial challenges of the PPL 235 discovery, Rift Oil said.

Shares of the company were up 2 pence at 8.375 pence at 0715 GMT on the London Stock Exchange. (Reporting by Shivani Singh in Bangalore; Editing by Vinu Pilakkott)


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