TotalEnergies SE has conditionally agreed to farm out a 20% interest in the Greater Laggan Area (GLA) producing gas fields and infrastructure alongside various interests in certain other exploration licenses, including a 25% interest in the Benriach prospect, to Kistos PLC.
Kistos will acquire 20% working interests in the producing Laggan, Tormore, Edradour, and Glenlivet gas fields, offshore the UK West of Shetland.
The acquisition includes a 20% interest in the undeveloped Glendronach gas field as well as a 25% interest in Block 206/4a, which contains the 638 bcf (operator's P50 resource estimate) Benriach prospect.
Kistos expects production from the assets to average about 6,000 boe/d (net) during 2022 with 2P reserves as at the effective date of Jan. 1 of 6.2 MMboe (operator's estimate).
Total consideration is $125 million and additional contingent cash payments. If the average day-ahead gas price at the National Balancing Point exceeds 150p/therm in 2022, up to $40 million will be payable in January 2023. Should Benriach be developed, Kistos will pay $0.25/MMBtu of net 2P reserves after first gas.
The deal is expected to close in second-quarter 2022 subject to customary regulatory and partner consents.
GLA assets
The producing GLA gas fields lie water depths of 300-625 m up to 125 km northwest of the Shetland Islands.
Development approval for GLA was granted in 2010 and first gas was achieved at Laggan and Tormore fields in 2016. Glenlivet and Edradour fields received development approval in 2015 and came on-stream in 2017.
Glendronach field was discovered in 2018 and it is anticipated that development will use existing infrastructure.
Produced gas is routed through two dedicated flowlines which surface at the purpose-built Shetland Gas Plant (SGP), where further processing is carried out prior to export to the St. Fergus Gas Terminal in Scotland.