Chrysaor Holdings said on Thursday it will acquire ConocoPhillips’ UK oil and gas business for $2.675 billion.

The assets being acquired produced 72,000 barrels of oil equivalent per day (boepd) in 2018.

The acquisition increases Chrysaor’s pro forma 2018 production to 177,000 boepd, making Chrysaor one of the largest oil and gas producers in the UK North Sea.

“As a result of this acquisition, Chrysaor will add three material assets to its portfolio,” said Chrysaor.

“These include two new operated hubs in the UK Central North Sea ‐ Britannia and J‐Block.

“In addition to the associated high‐quality oil and gas reserve base, these hubs have access to significant contingent resource potential providing near field opportunities for production growth and reserve replacement.

“The third material acquired asset is an interest in the world class Clair Field area located in the highly prospective West of Shetlands region.

“This interest and the Clair Field’s prospects for future additional development complement Chrysaor’s existing West of Shetlands position in the Schiehallion Field.

“In the UK Southern North Sea, Chrysaor will assume responsibility for an ongoing decommissioning programme on ConocoPhillips UK’s end‐of‐life assets.

“This decommissioning programme is very well advanced and proceeding in accordance with ConocoPhillips’ plans.

“Chrysaor plans to have materially completed execution of this programme by 2022, and values decommissioning competency as a long‐term commercial opportunity and enabler in the UK.”

Chrysaor is backed by Harbour Energy, an investment company managed by EIG Global Energy Partners.

Chrysaor will fund this acquisition from existing cash resources and an upsized $3 billion reserve based lending debt facility underwritten by Bank of Montreal, BNP Paribas, DNB Bank and ING Bank.

Chrysaor CEO Phil Kirk said: “This significant acquisition reflects our continuing belief that the UK North Sea has material future potential for oil and gas production.

“Acquiring ConocoPhillips UK accelerates our strategy and further strengthens our position as one of the leading independent exploration and production companies in Europe.

“These assets complement our existing operations and, with operating costs at less than $15 per barrel across the enlarged group, our portfolio delivers high margins and significant positive cash flow.

“In the Central North Sea, we will own a range of operated hub infrastructure providing access points in an area with the largest undeveloped contingent and prospective oil and gas resource base in the UK.

“In the West of Shetlands region, we have secured long life cashflows from two world‐class fields operated by BP.

“Chrysaor’s West of Shetlands position also provides exposure to a developing region with significant interest and momentum from major oil companies.

“We will seek to build on that through the acquisition of additional interests and acreage …

“We see exciting growth opportunities in the North Sea and are looking forward to working with our new colleagues to safely sustain and deliver our value and growth targets.”

BMO Capital Markets Limited and Jefferies International Limited are acting as joint financial advisers to Chrysaor.