Page 8 - Euroil Week 43 2019

EurOil INVESTMENT EurOil
Producers eye further North Sea sales
UK
M&A activity in the region remains high.
TWO more oil companies are mulling divest- ments in the UK North Sea, according to reports by Reuters, following a period of high M&A activity in the mature zone.
Private-equity firm Kerogen Capital is seek- ing offers for its North Sea business Zennor Petroleum from a shortlist of potential buyers, sources told the news agency on October 24. US investment bank Citi has been hired to assist with the process, they said.
Serica Energy could file a bid, one source claimed, but the UK operator has not confirmed this. Kerogen is testing the waters to see how much interest there is in Zennor, sources said. Offers will be accepted until the end of the year.
Zennor currently produces around 5,000 bar- rels of oil equivalent per day, but boasts a project pipeline that is due to produce 35,000 boepd by 2023. Sources valued the company at between “several million” dollars and $750mn.
Hong Kong-based Kerogen bought Zennor in 2015. The firm has non-operated stakes in a number of producing fields in the central North Seas around the Britannia and Eastern Trough Area Project (ETAP) hubs, including Britannia, East Cormorant, Bacchus, Mungo and Monan. It is the sole owner of the 30mn barrel Finlaggan field, due to start up as a tieback to the Britannia platform late next year.
Meanwhile, state-owned Korea National Oil Corp. (KNOC) is looking to divest its 50% share in the Tolmount gas project operated by the UK’s Premier Oil, sources told Reuters on October 25.
Earlier this year the debt-laden company had tried to offload a 49% stake in its North Sea-fo- cused subsidiary Dana Petroleum but was una- ble to generate interest, sources said. It therefore decided to limit the sale to Tolmount.
The Greater Tolmount Area holds 1tn cubic feet (28bn cubic metres) of gas, according to Premier, with 14.2 bcm located at the main Tol- mount field due on stream in the fourth quarter of 2020. Earlier this month Premier reported the discovery of 6.2 bcm of gas at the Tolmount East site.
KNOC took control of Dana in a hostile take- over in 2010 worth $2.9bn, including debt. The subsidiary has interests in a total of 22 producing oil and gas fields in the North Sea, with key assets including the Western Isles and Triton floating production vessels. Outside the UK it also oper- ates in the Dutch North Sea and in Egypt.
There have been a number of high-pro- file deals in the UK North Sea in recent years, with the main trend being the advent of private equity-backed buyers and the exit of oil and gas majors. In September, ConocoPhillips com- pleted its $2.68bn sale of offshore UK assets to London-based Chrysaor, and earlier this month, Energean Oil & Gas agreed to transfer North Sea assets it is acquiring from Italy’s Edison to the UK’s Neptune Energy for $280mn.
US major ExxonMobil is also reported to be seeking a withdrawal from UK waters, having just sold its Norwegian operations for $4.5bn to Eni-owned Var Energi. ™
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w w w . N E W S B A S E . c o m Week 43 31•October•2019