Bids for a portfolio of Exxon Mobil Corp.'s British North Sea oil and gas fields, which is expected to fetch around $1 billion following this year's oil price weakness, are due on Oct. 28, two sources with knowledge of the process said.
Parties that have signaled interest in acquiring more assets in the basin include private-equity (PE) firm HitecVision's NEO Energy, EIG's Chrysaor Holdings Ltd. and listed companies, such as EnQuest Plc.
Commodities trading house Mercuria Energy Group Ltd., via producer Tailwind, is also considering the portfolio, two sources said on condition of anonymity. Eni SpA, via its joint venture (JV) Var with HitecVision, has been buying assets in the Norwegian North Sea.
"It will be interesting to see in November/December the outcome of Exxon's UK sale as these competing forms of capital—stock market, PE Funds, Traders—assess who can get most value from this situation," one of the sources said.
Any buyer will likely seek to operate the assets, the sources said.
Established independent producers in the British North Sea, such as EnQuest and Premier, are burdened with debt.
Premier is trying to raise equity to buy BP Plc assets, whose past losses could be used to reduce future tax bills, but is also in talks with Chrysaor on alternative deals.
Hitec is considering an acquisition of Suncor Energy Inc.'s North Sea assets, one of the sources said.
Most of Exxon Mobil's British operations are managed through Esso Exploration and Production UK, a 50-50 JV with Royal Dutch Shell Plc.
The portfolio under discussion, which excludes assets in the southern North Sea, produces around 35,000 boe/d, which is expected to increase to just under 60,000 boe/d by around 2023, the sources said.
Initially, Exxon Mobil hoped to raise over $2 billion from the sale and it was planned for late last year. In June sources told Reuters the portfolio was more likely to fetch $1 billion to $1.5 billion given the oil price weakness this year.
HitecVision, EnQuest, Exxon Mobil, Mercuria and Chrysaor all declined comment.
Oil demand is down 13% as a result of the pandemic.
That was the lowest close for Brent crude since June 12 and for WTI since Oct. 2. It was the biggest daily percentage losses for both benchmarks since Sept. 8.
During the week ahead, Stratas Advisors expect Brent to continue falling as demand fears grow, likely averaging $60/bbl.