Norwegian E&P DNO ASA’s subsidiary DNO Exploration U.K. Ltd. has agreed to acquire a 25% interest in the Arran Field on the U.K. Continental Shelf from ONE-Dyas E&P Ltd.

DNO will pay $70 million for the interest — and up to $5 million in additional payments if certain operational targets are met.

DNO said the transaction is expected to add about 4 MMbboe, 90% gas, with projected net 2024 production averaging 2,000 boe/d to 2,500 boe/d.

Arran started production in 2021 as a subsea tie-back to the Shearwater A platform, both operated by Shell U.K. Ltd. Gas from Arran is exported via the Fulmar Gas line to the St. Fergus Terminal, while liquids are exported to Cruden Bay via the Forties Pipeline System.

“Arran fits neatly in our strategy of acquiring bolt-on producing assets as we develop our significant discoveries in Norway,” said Chris Spencer, DNO’s managing director. “The company expects financial synergies between Arran and DNO’s existing position in the U.K.”

DNO’s deal continues the company’s expansion of its North Sea portfolio, which includes an average of 14,200 boe/d almost exclusively from fields in Norway. DNO expects production to grow as ongoing development projects including Trym Restart (50% interest, operator), Andvare (32% interest) and Berling (30% interest) are brought onstream.

In 2023, DNO’s exploration program delivered four additional discoveries and two successful appraisal wells in Norway.

The transaction’s effective date is Jan. 1, 2024. The transaction is expected to close in second-quarter 2024, subject to regulatory approvals.