The transaction consists of a material, cash generative 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 the portfolio among the 20 largest producers on the UKCS. The transaction includes operatorship of two assets, the Quad 15 and Flyndre areas, and an operator organisation of around 110 employees and contractors.
The acquisition, which is subject to approval from the relevant authorities, is made by Petrogas NEO UK Ltd, a company jointly owned by Petrogas E&P UK Ltd, a subsidiary of Oman based Petrogas (a part of conglomerate MB Holding group) and NEO E&P, an investment platform of HitecVision.
Petrogas and HitecVision intend to jointly build a full-cycle North Sea operator focusing on combining value creation from the prospective North Sea basin with high Environmental, Social and Governance standards. The current acquisition is the first step in the realisation of this strategy and provides a fundament for further expansion through organic and in-organic activities, including growing its operatorship position further.
The fundamental and highest priority after completion of transaction will be the continuation of safe and efficient operations. With the operatorship capabilities and expertise of the organisation transferred from Total, and the free cash flow generated by the assets, Petrogas NEO will also pursue further growth. The assets to be acquired contain several organic growth opportunities, including infill drilling and development of discoveries close to existing infrastructure, and there is a potential for significant investments and increased activity in the years ahead. Petrogas NEO plans to actively exploit these opportunities, in close cooperation with the UK Oil and Gas Authority and licence partners, while at the same time focusing on improved environmental performance, in line with the company’s strategy of minimising the carbon footprint of its oil and gas production.
The transaction is subject to customary regulatory consents and is expected to complete in Q4 2019, with an effective date of January 1, 2019. The acquired assets are supported by about 110 employees and contractors, including both onshore and offshore operations staff, together with other technical and support functions. Given the company’s growth plans and other opportunities, Petrogas NEO intends to build on the current Aberdeen presence of Total and no redundancies are expected as a result of the transaction. It lays a solid foundation towards the objective of building a leading energy company, with production of more than 100,000 boepd.
Usama Barwani, CEO of Petrogas, commented: “Five years back, Petrogas stepped in to 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.”.
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