Faroe Petroleum to buy UK North Sea interests from Tullow

Faroe Petroleum Ltd. has entered into an agreement with Tullow Oil PLC unit Tullow Oil SK Ltd. to buy 53.1% of Tullow’s Schooner unit interest along with 60% of its Ketch asset in the UK southern North Sea to for $75.6 million. The deal is effective Jan. 1.

The sale is expected to be complete by yearend, with Faroe becoming operator of both assets. Of the $75.6 million total consideration, $58.8 million will be paid on completion of the sale with the balance payable on the achievement of cumulative production milestones.

Tullow said it’s continuing to market its remaining southern North Sea gas assets in the UK and the Netherlands, with value being increased in the latter following the gas discovery at the Vincent well earlier in the year.

The move follows the sale of Tullow’s gas assets in Bangladesh and the agreement to sell its Pakistan business last year (OGJ Online, Dec. 17, 2013).

Tullow’s production guidance for the year remains at 79,000-85,000 boe/d, with a pro rata adjustment to be made after the sale of these assets is completed.

The company currently holds 93.1% in Schooner and 100% interest in Ketch.

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