Neptune Energy Acquires North Sea Assets from Energean
Neptune Energy has entered into a conditional Sale and Purchase Agreement with Energean Oil and Gas to acquire Edison E&P’s UK and Norwegian producing, development and exploration assets for an initial cash consideration of $250 million. The purchase is contingent on Energean completing its proposed acquisition of Edison E&P.
The portfolio will provide Neptune with material growth in contingent resources, an estimated 30 million barrels of oil equivalent (mmboe) of 2P reserves and near-term production in core areas of the North Sea close to infrastructure. It includes:
- Glengorm gas condensate discovery (25% WI) in the UK’s Central North Sea, close to Neptune’s operated Seagull project. Glengorm is an additional contingent resource.
- Nova gas development project (15% WI) in the Norwegian North Sea: Nova is being developed as a subsea tie-back to the Neptune-operated Gjøa field. Production is expected from 2021, with estimated net 2P reserves of more than 11mmboe.
- Dvalin (10% WI) gas development project in the Norwegian North Sea: developed as a subsea tie-back to Heidrun, the four gas wells are expected to be drilled from the end of 2019, with first gas expected by the end of 2020. Net 2P reserves are estimated at more than 11mmboe.
- Scott (10.5% WI) & Telford (15.7% WI), Tors (68 per cent WI), Wenlock (80% WI) and Markham (3.1% WI): combined incremental non-operated production of 3,000 barrels of oil equivalent per day (boepd) in 2019. Tors is strategically important to the Neptune-operated Cygnus field due to the shared export route.
Jim House, CEO of Neptune, said: “This is an important bolt-on acquisition that is in line with our strategy of consolidating our position in key areas with high quality and complementary assets. The assets are an excellent fit with our North Sea portfolio. Nova and Dvalin are expected to add 12,000boepd to our production base over the next two years and Glengorm adds significant potential for the longer term.”
Mathios Rigas, Chief Executive of Energean, commented: “The acquisition of Edison E&P established Energean as the leading independent, gas-focused E&P Company in the Mediterranean. At the time of announcement, we committed to our Shareholders that we would seek to dispose of non-core assets that do not adhere to our strategy. I am delighted to be able to make this announcement. Neptune is a leading player in the UK and Norway upstream sectors and, as such, we are convinced that under Neptune’s ownership, Edison E&P’s UK and Norway teams will benefit from the increased focus and investment that will result from this strategic alignment.”
The transaction is subject to customary regulatory approvals, with completion expected early in 2020.