Verus Petroleum, Aberdeen, has agreed to acquire Cieco Exploration & Production (UK) Ltd., London, a wholly owned subsidiary of Itochu Corp. with assets in the North Sea, for $400 million.
The sale and purchase agreement, which would add 11,000 boe/d to the company’s daily production, builds on the Boa oil field acquisition in 2017, and the acquisition of interests in Alba oil field and Babbage gas field earlier this year. Combined, the Alba, Babbage, and Cieco acquisitions increase the company’s net production to 18,000 boe/d, said Verus Petroleum Chief Executive Officer Alan Curran.
The acquisition includes a 23.1% interest in Dana Petroleum PLC-operated Western Isles Development Project, a 25.8% interest in the Dana Petroleum-operated Hudson field, a 2% interest in the Abu Dhabi National Energy Co. PJSC (TAQA)-operated Brent Pipeline System, and a 1.2% interest in the EnQuest PLC-operated Sullom Voe oil terminal.
Hudson field is a subsea development of seven production wells supported by two injection wells on Block 210/24. Oil is produced from sandstone members of the Brent formation contained in a dip closed tilted fault block. The produced fluids flow 12 km from the subsea manifold to the Tern platform, where the fluids are processed and the oil pumped in to the Brent Pipeline System and the onshore terminal at Sullom Voe, according to Cieco’s web site. The field contains 200 million bbl of oil in place and has an estimated ultimate recovery of 60%.
The Western Isles Development Project (WIDP) comprises two discovered oil fields—Harris and Barra—160 km east of the Shetland Islands. WIDP will be a subsea development of at least five production wells and four water injection wells plus two exploration wells tied back to a newbuild floating production, storage, and offloading vessel with oil exporting via shuttle tanker, according to Cieco’s web site.
“Production has exceeded expectations since it started in November 2017 and is currently on plateau at in excess of 40,000 boe/d, with an estimated field life of 15 years,” Curran said.
Subject to regulatory approvals, the deal is expected to close in this year’s fourth quarter and will be funded by a combination of equity, existing cash reserves and debt. As the acquired entity is an asset holding company, the deal does not involve personnel transfer.
Contact Mikaila Adams at [email protected].
