Page 5 - Euroil Week 21 2020
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EurOil COMMENTARY EurOil
Map showing assets Total intends to sell to HitecVision. Source: Total
of more than 60% in the Flyndre, Affleck and Cawdor fields.
The deal also covers Total’s shares in the CNOOC-operated GoldenEagle, Scott and Tel- ford fields.
Other deals
While Total and Hitec still say their deal is on track, London-listed Energean Oil & Gas’s $280mn sale of North Sea assets to regional pro- ducer Neptune Energy was not so fortunate.
Energean reported on May 19 that the deal had fallen through, posing difficulties for its larger plan to acquire the upstream arm of Italy’s Edison.
Energean last summer announced it would buy Edison E&P for $750mn, in order to build up its Mediterranean business with the acquisi- tion of fields in Algeria, Croatia and Egypt. But the deal also comprised operations off Norway and the UK, which Energean then agreed to sell to Neptune.
However, the two companies revealed on May 19 that they had “agreed to terminate the agreement”, with Neptune paying a $5mn termi- nation fee to Energean.
“Energean remains committed to its acquisi- tion of Edison E&P, and is working to complete the transaction as soon as possible,” Energean said.
This marked a second setback for the com- pany, which in April said that Edison E&P’s Algerian business had been excluded from the deal because of opposition from the North Afri- can country’s government. The company said it was in talks with Edison to amend the sales agreement potentially to exclude Edison’s E&P’s Norwegian business. But it will still pursue the purchase of its stakes at the UK’s Glengorm and Isabella discoveries.
Meanwhile, the UK’s Premier Oil appears to be having second thoughts about its plan to spend up to $871mn acquiring North Sea assets from BP and South Korea’s Dana Petroleum. Pre- mier said on May 13 it would discuss the deals, first announced in January, with shareholders, creditors and brokers “in light of the current market conditions.” It has reportedly asked BP to lower its price.
The COVID-19 pandemic has taken a toll on M&A activity globally, the combined value of international upstream deals slumping to $5.7bn in the first quarter, versus a three-year Q1 aver- age of $17.3bn, according to financial data firm Finbrook.
Buyers and sellers will have difficulty agree- ing on asset prices with the market outlook so uncertain. This is likely to deter ExxonMobil, for the time being, from following through with the sale of its UK operations as part of its total with- drawal from Europe’s upstream sector.
Similarly, private equity firms Blackstone and Blue Water Energy are likely to put on hold their search for a buyer for North Sea-focused Siccar Point Energy. Even before the crisis the pair were having difficulty agreeing a sales price, which reportedly led to UK-based Chrysaor ending talks with them in January.
BP’s Shearwater platform is one of the assets Premier agreed to buy.
Week 21 28•May•2020
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