Norway-based private equity fund HitecVision and Oman-based oil group Petrogas have joined forces to buy a portfolio of British North Sea oilfields for $635 million from French giant Total.
The assets include the Dumbarton, Balloch, Lochranza, Drumtochty fields and majority stakes of more than 60% in Flyndre, Affleck and Cawdor.
The deal also includes stakes in three fields operated by China’s CNOOC — including 32% of Golden Eagle, 5% of Scott and 2% of Telford. (See map below).
“The transaction consists of a material, cash generative business based on a portfolio of assets in four producing areas in the UK North Sea, with an expected average 2019 production of 25,000 barrels of oil equivalent per day (boepd), placing it among the 20 largest producers on the UKCS,” said HitecVision in a statement.
Petrogas CEO Usama Barwani said: “Five years back, Petrogas stepped into Europe by acquiring Chevron’s assets in the Netherlands, opening a new international heartland with vision of consolidation and growth in the North Sea.
“This acquisition in the UK is a significant step in line with a wider vision, adding material asset base, a diverse portfolio and valuable talent pool.”
John Knight, senior partner of HitecVision, said: “In the last few years we have clearly seen the creation of a ‘New European Offshore’ in terms of ownership , investment and innovative financial models.
“Private equity backed companies and joint ventures are emerging as among the largest investors in Norway and the UK.
“Larger companies are focusing their assets in Europe on a few key assets or exiting the region.
“In HitecVision we have invested in this theme in JVs like Vår Energi. Now this acquisition is our first step towards creating something similar in the UK.”
Arnaud Breuillac, President Exploration & Production at Total, said: “This transaction is consistent with our portfolio management strategy, aiming at lowering our break-even point by optimizing capital allocation and divesting high technical costs assets.
“Our primary objective is to maintain the organic break-even before dividend below $30 per barrel and high-grading our portfolio will help us achieve this.”