Page 8 - EurOil Week 30 2021

EurOil INVESTMENT EurOil

Centrica to simplify

Spirit sale

UK UK energy group Centrica has said it will sim- in December.
plify the sales process for its upstream arm Spirit Spirit was free cash flow (FCF) positive in
Centrica launched its Energy, after struggling to find a buyer. the first half of 2021 and is expected to remain
search for a buyer in The London-listed owner of British Gas said this way for the rest of the year. But its pro-
2019. the joint venture structure of Spirit had sapped duction slumped 28% to 17.1mn barrels of
interest among buyers. Centrica has a 69% inter- oil equivalent (boe). It blamed this decline on
est in the stake, while the remaining share is production issues at a number of fields and
held by Stadtwerke München Group and other planned outages that the company brought
shareholders. forward.
Centrica launched the search for a buyer for Full-year output is set to come to around
its position at Spirit in 2019 but put the process 15-20% lower than in 2020, when Spirit
on hold in April last year after the pandemic extracted 44.9mn boe.
broke out. In a statement last week, Centrica Adjusted operating profits at Spirit increased
said it had “made progress towards pursuing from GBP34mn to GBP104mn ($143mn) on the
alternative sale options,” in order to “simply the back of higher oil and gas prices.
sale structure” and help it maximise the value of Centrica also started seeking a buyer for its
its assets while “de-risking liabilities.” portfolio of LNG supply contracts and other
Centrica was quoted as saying that it was in assets late last year, according to the Wall Street
talks with “a number of parties” by Bloomberg Journal. ™

Shareholders back EnQuest takeover

of stake in Golden Eagle fields

UK SHAREHOLDERS have backed London-listed with some of those decisions taken prema-
EnQuest’s bid to acquire a stake in the Golden turely in light of the impact of the coronavirus
EnQuest is eager to beef Eagle field group in the UK North Sea from Can- (COVID-19) pandemic on oil markets.
up its portfion, which ada’s Suncor. In early June EnQuest also completed the
has shrunk dramatically EnQuest announced a deal to buy Suncor’s takeover of 100% of the Bentler heavy oil discov-
since 2019. 26.7% interest in the Golden Eagle area for an ery in the UK North Sea from Whalsay Hold-
initial $325mn, as part of efforts to build up ings. That deal, reached in April, saw EnQuest
its North Sea position following the closure of pay nothing upfront. But it has agreed to cover
several of its older fields. It expects to net some certain Whalsay costs and obligations amount-
10,000 barrels of oil equivalent per day (boepd) ing to under $2mn, and will make deferred pay-
of production and 18mn barrels of proven and ments of up to $40mn based on future revenues
probable reserves from the deal. It went on to from the field.
borrow $750mn to fund the takeover, obtaining EnQuest’s spending spree also saw it acquire a
a senior secured borrowing base debt facility 40.8% interest in the Bressay heavy oilfield, situ-
worth $600mn and $150mn in letters of credit ated east of the Shetland Islands, from Norway’s
(L/Cs) for up to seven years. EnQuest also raised Equinor in January. It paid a mere GBP2.2mn
$50mn from the issue of new shares. ($2.9mn) for that stake, although a further
EnQuest is eager to beef up its portfolio, $15mn is payable once Bressay’s development
which has shrunk dramatically since 2019. Since plan is approved by the UK authorities.
then, the company has ceased production at its Besides the early closures, EnQuest’s flagship
Thistle, Heather, Alma-Galia and Dons fields, Kraken oilfield entered decline last year. ™

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