DNO Exploration UK Ltd., a DNO ASA subsidiary, has agreed to acquire a 25% interest in the Shell UK Ltd.-operated Arran gas and condensate field in the UK North Sea from ONE-Dyas E&P Ltd. The deal is comprised of a cash consideration of $70 million plus a contingent consideration of up to $5 million if certain operational targets are met.
Arran started production in 2021 as a subsea tie-back to the Shell-operated Shearwater A platform. Gas from Arran is exported via the Fulmar Gas line on to the St. Fergus Terminal while liquids are exported to Cruden Bay via the Forties Pipeline System.
The deal is expected to add about 4 MMboe net to DNO, of which 90% is gas, with projected net 2024 production of 2,000-2,500 boe/d.
With this transaction, DNO continues to expand a North Sea portfolio that includes 14,200 boe/d of production currently almost exclusively from fields in Norway which will grow as ongoing development projects notably Trym Restart (50%, operator), Andvare (32%), and Berling (30%) are brought onstream.
The deal is expected to close in second-quarter 2024, subject to authorities’ approval.
