Private-equity fund HitecVision AS and Omani oil group Petrogas E&P LLC have teamed up to buy a portfolio of Total SA's British North Sea oil fields for $635 million, the companies said July 10.
The fields, which are set to produce 25,000 barrels of oil equivalent per day (boe/d) this year, will be owned by a subsidiary of the two groups called Petrogas NEO UK Ltd. which they want to expand to produce more than 100,000 boe/d within two to three years.
The British North Sea has seen a change of guard since the oil price collapsed to below $30 a barrel in 2016 with big companies selling fields to new private-equity-backed operators seeking to squeeze more barrels out of the mature basin and then exit.
HitecVision, an offshore energy-focused fund with $5.5 billion under management, last December partnered with Eni SpA to build Vår Energi AS, now one of Norway's largest producers at 169,000 boe/d. It has paid out $1 billion in dividends to HitecVision shareholders in Var.
HitecVision plans to turn Petrogas NEO—controlled equally by the two partners—into a U.K. version of Var.
"The current acquisition is the first step ... and provides a fundament for further expansion through organic and in-organic activities," Petrogas NEO's owners said in a statement.
When asked about a potential stock market listing of the new vehicle, HitecVision senior partner John Knight told Reuters there were many possible exits for a private equity firm.
These include mergers, dividend payouts and sales to financial investors, he said, adding HitecVision was looking at opportunities for consolidation within its portfolio.
Hitecvision also owns Verus Petroleum Ltd., which produces around 17,000 boe/d.
Wednesday's deal is backdated to Jan. 1 this year and expected to close in the fourth quarter, pending regulatory approval.
The oil-focused portfolio includes Total-operated fields Dumbarton, Balloch, Lochranza, Drumtochty, Flyndre, Affleck, Cawdor and minority stakes in CNOOC-operated Golden Eagle, Scott and Telford, the buyers said.
Several fields can be developed further to squeeze as many barrels as possible from the portfolio.
Total's overall production in Britain was 185,000 boe/d last year, according to its website, with gas accounting for more than half.
Recommended Reading
Exclusive: Silixa’s Distributed Fiber Optics Solutions for E&Ps
2024-03-19 - Todd Chuckry, business development manager for Silixa, highlights the company's DScover and Carina platforms to help oil and gas operators fully understand their fiber optics treatments from start to finish in this Hart Energy Exclusive.
CERAWeek: AI, Energy Industry Meet at Scary but Exciting Crossroads
2024-03-19 - From optimizing assets to enabling interoperability, digital technology works best through collaboration.
Cyber-informed Engineering Can Fortify OT Security
2024-03-12 - Ransomware is still a top threat in cybersecurity even as hacktivist attacks trend up, and the oil and gas sector must address both to maintain operational security.
Forum Energy Signs MOU to Develop Electric ROV Thrusters
2024-03-13 - The electric thrusters for ROV systems will undergo extensive tests by Forum Energy Technologies and SAFEEN Survey & Subsea Services.
Axis Energy Deploys Fully Electric Well Service Rig
2024-03-13 - Axis Energy Services’ EPIC RIG has the ability to run on grid power for reduced emissions and increased fuel flexibility.