EnQuest PLC has agreed to acquire Suncor Energy UK Ltd.’s entire 26.69% interest in the CNOOC-operated UK North Sea Golden Eagle area, comprising the producing Golden Eagle, Peregrine, and Solitaire fields.
The companies have agreed that EnQuest will acquire 100% of the shares in North Sea (Golden Eagle) Resources Ltd., a new company which will, at completion of the transaction, hold Suncor’s non-operated equity interest in the Golden Eagle area.
The deal adds immediate incremental production of 10,000 boe/d, 18 million bbl to net 2P reserves, and 5 million bbl to net 2C resources, EnQuest said.
The assets hold significant remaining development potential, according to EnQuest, with anticipated field life extending into the early 2030s. A four-well infill drilling program is ongoing, with two of the four wells onstream. The program is scheduled to conclude prior to completion of the transaction.
Unsanctioned activities associated with further subsea and platform infill drilling, topsides water debottlenecking, and an active well intervention program are being assessed, the company said, while various third-party near-field tie-back opportunities are being considered.
The initial consideration is $325 million, with an additional contingent consideration of up to $50 million based on crude prices between July 2021 and June 2023.
The deal, expected before the end of this year’s third quarter, is subject to various conditions, including funding arrangements, approval from EnQuest's shareholders, approvals of joint venture partners, and receipt of other customary regulatory and third-party consents. Total E&P North Sea UK Ltd. and ONE-Dyas hold shares in the Golden Eagle area.
2021 outlook
In a separate release, EnQuest laid out its 2021 guidance, noting a 2021 average net group production of 46,000-52,000 boe/d is expected. Gross production from Kraken heavy oil field in the East Shetland basin of the UK North Sea is expected to be 30,000-35,000 bo/d (21,150-24,675 bp/d net).
Operating expenditure is expected to be $265 million with combined cash capital and abandonment expenditure of $120 million.
