UKCS Player Signs US$400 million Acquisition Agreement

UK Continental Shelf focused oil and gas company Verus Petroleum has signed an agreement for the acquisition of Cieco Exploration & Production (UK) Limited, a wholly owned subsidiary of Itochu Corporation.

The consideration is US$400 million, with an economic date of the 1^st January 2018. The acquisition includes a 23.1 percent interest in the Western Isles Development Project, a 25.8 percent interest in the Hudson field, a 2 percent interest in the Brent Pipeline System and a 1.2 percent interest in the Sullom Voe oil terminal.

The transaction, which is subject to customary regulatory approvals, is expected to complete in the fourth quarter and will be funded by a combination of equity, existing cash reserves and debt.

“Verus is pleased to have signed this SPA [Sale and Purchase Agreement] with Itochu, which is aligned with our strategy to expand our production base and cash flow through the acquisition of high quality production assets,” Alan Curran, chief executive of Verus Petroleum, said.

“We are delighted to acquire high value barrels with the Western Isles production in particular having very low lifting costs and being a long-life asset with strong cash generation,” he added.

On the 30^th April, Verus announced that it had signed an agreement for the acquisition of a 47 percent operated interest in the Babbage gas field from Premier Oil.

In the same month, Verus announced the signing of an agreement for the acquisition of a 17 percent non-operated interest in the Alba oil field from Statoil (now known as Equinor).

In October 2016, Verus announced the completion of the sale of its interests in the Vulcan satellite gas fields to Independent Oil and Gas Plc.

Source: Rigzone