22 October 2013
EnQuest acquires 50% of the Greater Kittiwake Area, close to Scolty/Crathes,
potentially creating a new EnQuest development and production hub.
EnQuest PLC ('EnQuest'), is pleased to announce an agreement to acquire the UKCS
Greater Kittiwake area ('GKA') assets currently owned by Centrica North Sea Oil
Limited ('Centrica'), as well as Centrica's 100% interest in the Kittiwake to
Forties oil export pipeline. The agreements are subject to the normal regulatory
and third party consents.
EnQuest will pay a base consideration of US $39.9 million and will additionally
assume net debt of US $5.1 million, which is subject to certain working capital
and other adjustments. Additionally EnQuest will pay a deferred consideration of
US $30 million, contingent on regulatory approval of a field development plan
('FDP') for the Scolty field and/or the Crathes field which includes a tie-back
to the Kittiwake platform. Further contingent consideration may be payable,
subject to future exploration success.
Highlights
· Acquisition of Centrica's entire 50% share of the Greater Kittiwake Area
assets.
· Acquisition of Centrica's 100% interest in the Kittiwake to Forties oil
export pipeline.
· Acquisition of 2P reserves of 4.7 Mmboe, as at the economic date of 1
January 2013.
· Acquisition of additional production; current net production from these GKA
fields is c.2,000 Boped
· Establishment of a potential new EnQuest hub; the GKA fields and Scolty and
Crathes are all in close proximity.
· Facilitation and enhancement of EnQuest's proposed development of
Scolty/Crathes, with an opportunity to tie-back to Kittiwake; the tie-back is
subject to ongoing commercial discussions and partnership agreement between the
owners of Scolty/Crathes and Kittiwake.
EnQuest CEO Amjad Bseisu said:
"I am delighted to announce our acquisition of these Greater Kittiwake Area
assets, giving us an additional UK hub and adding 4.7 MMboe to our reserves.
This acquisition fits within our goals of managing mature fields, and of
exploiting nearby discoveries and near field exploration opportunities.
Our Scolty and Crathes discoveries are within the area and would benefit from a
tie-back to Kittiwake. These opportunities would also allow for the extension of
the GKA field life.
The transaction also provides infill drilling opportunities in the Greater
Kittiwake Area fields and improves the potential from exploration opportunities,
both in the GKA area and in our existing acreage nearby."
Main details of assets being acquired:
· The Greater Kittiwake Area is located in UKCS blocks 21/12a (licence P.073),
21/12d (P.1786), 21/17a (P.1415), 21/17c (P.1415), 21/18a (P.351) and 21/19
(P.238); it includes the Kittiwake, Mallard, Gadwall, Goosander and Grouse
fields.
· The GKA fields have been developed as subsea tie-backs to a steel platform
located at Kittiwake. This platform has an oil capacity of 29,000 Boepd and a
water injection capacity of 57,000 Boepd.
· Water depth of 85-90m.
· Oil is exported via a 33 km 10" pipeline to the Forties Unity platform and
then to shore at Cruden Bay via the Forties Pipeline system.
Further consideration details:
The aggregate maximum consideration for all the assets being acquired:
· A base consideration of US $39.75 million for the GKA assets subject to
normal working capital and some other adjustments. This includes a downward only
production adjustment of up to US $7.1 million, from the base consideration, if
the actual production from the Grouse and Mallard Fields during the period 1st
August to 31st December 2013 falls below a specified volumetric threshold. The
production from the Grouse and Mallard Fields is currently shut in for
operational reasons.
· A base consideration of US $107,000 for the acquisition of NSIP (GKA)
Limited, which is the entity which owns the Kittiwake to Forties pipeline; this
figure assumes working capital adjustment and repayment of an inter-company loan
by EnQuest to NSIP Holdings/Centrica of US $ 5.1 million at 1 January 2013..
· A total deferred consideration of US $30 million, contingent upon Government
approval of a field development plan in respect of the Scolty and/or Crathes
offshore fields which incorporates a tie back of the Scolty and/or Crathes
offshore fields to the Kittiwake platform.
· A further contingent consideration payable subject to future exploration
success in two defined prospects in Block 21/19. A bonus will become payable
upon Government approval of a field development plan in respect of such
discoveries, and will be calculated on a sliding scale of zero to $2.9 per
barrel of proved and probable oil reserves defined in the relevant field
development plan, up to a maximum aggregate amount payable of US $100 million.
Background note on Scolty/Crathes
· EnQuest has a 40% interest in each of the Scolty and Crathes discoveries;
development planning continues on Scolty/Crathes and it is intended that an FDP
will be submitted in 2014. A number of potential off-take routes for future
Scolty/Crathes production have been identified, of which Kittiwake is a strong
candidate. The future use of Kittiwake as an export route is subject to the
successful conclusion of on-going commercial discussions between Scolty/Crathes
and GKA owners.
Ends
For further information please contact:
EnQuest PLC Tel: +44 (0)20 7925 4900
Amjad Bseisu (Chief Executive)
Jonathan Swinney (Chief Financial Officer)
Michael Waring (Head of Communications & Investor
Relations)
Finsbury
Tel: +44 (0)20 7251 3801
Conor McClafferty
Dorothy Burwell
Notes to editors
EnQuest is the largest UK independent producer in the UK North Sea. Oil and gas
development and production company EnQuest PLC, trades on both the London Stock
Exchange and the NASDAQ OMX Stockholm. It is a constituent of the FTSE 250
index. Its assets include the Thistle, Deveron, Heather, Broom, West Don, Don
Southwest and Conrie producing fields and the Alma and Galia development. At the
end of H1 2013, EnQuest had interests in 33 production licences covering 45
blocks or part blocks in the UKCS, of which 25 licences are operated by EnQuest.
In addition, EnQuest also has an interest in two blocks offshore in Sabah,
Malaysia.
EnQuest believes that the UKCS represents a significant hydrocarbon basin in a
low risk region, which continues to benefit from an extensive installed
infrastructure base and skilled labour. EnQuest believes that its assets offer
material organic growth opportunities, driven by exploitation of current
infrastructure on the UKCS and the development of low risk near field
opportunities. www.enquest.com
Forward looking statements: This announcement may contain certain forward
-looking statements with respect to EnQuest's expectation and plans, strategy,
management's objectives, future performance, reserves, production, costs,
revenues and other trend information. These statements and forecasts involve
risk and uncertainty because they relate to events and depend upon circumstances
that may occur in the future. There are a number of factors which could cause
actual results or developments to differ materially from those expressed or
implied by these forward looking statements and forecasts. The statements have
been made with reference to forecast price changes, economic conditions and the
current regulatory environment. Nothing in this presentation should be construed
as a profit forecast. Past share performance cannot be relied on as a guide to
future performance.
Acquisition
| Source: EnQuest PLC