UK oil and gas producer EnQuest has acquired a further 25 per cent stake in the Kraken oil discovery from Nautical Petroleum.
EnQuest will pay up to $240 million for the stake, together with interests in surrounding exploration acreage, based on the determination of gross reserves.
The acquisition will bring EnQuest’s stake in Kraken up to 45 per cent, following its previous purchase of a 20 per cent stake from oil and gas explorer Canamens earlier this month. Nautical retains a 25 per cent interest, with First Oil holding the remaining 30 per cent.
The purchase from Nautical will see EnQuest become the operator of the field.
Kraken is a large heavy oil accumulation in the UK North Sea, located in the East Shetland basin to the west of the North Viking Graben. It is currently being progressed to development following successful appraisal and well test results.
EnQuest is the largest UK independent producer in the UK North Sea, with assets including the Thistle, Deveron, Heather, Broom, West Don and Don Southwest producing fields and the Alma and Galia development. At the end of the first half of 2011, EnQuest had interests in 20 production licences covering 25 blocks or part blocks in the UK Continental Shelf, of which it operates 18 licences.
EnQuest said it believes that the UKCS represents a significant hydrocarbon basin in a low-risk region, which continues to benefit from an extensive installed infrastructure base and skilled labour.
Commenting on the acquisition, Amjad Bseisu, chief executive of EnQuest, said: “EnQuest is very pleased to be able to increase its interest in Kraken and to become the future operator of the proposed development. Based on the operator’s estimates, this 25 per cent interest in Kraken provides 40 MMboe [million barrels of oil equivalent] of contingent resources, which when combined with the 32 MMboe of contingent resources from the 20 per cent interest that EnQuest acquired earlier this month from Canamens, adds almost 70 per cent to EnQuest’s end 2010 contingent resources.”
He went on to say: “With EnQuest’s integrated project development capabilities, our execution team will take the project forward and lead the development, subject to approval of the Field Development Plan. With Nautical’s background and deep expertise in this project, EnQuest is keen to combine forces and to jointly move forward what we believe to be one of the most exciting development projects in the UK North Sea.”
