The acquisition of the UK North field project will give an incremental production of around 10kboepd to EnQuest
EnQuest has agreed to acquire Canada-based Suncor Energy’s 26.69% stake in the Golden Eagle development in the UK North Sea in a deal worth up to $375m.
Under the terms of the transaction, EnQuest will make an initial payment of $325m to Suncor Energy UK, the Canadian firm’s subsidiary. This will be followed by an additional contingent consideration of up to $50m
The UK-based company will pay $25m in the second half of 2023, if the Dated Brent average crude price equals or surpasses $55/barrel of oil (bbl) between July 2021 and June 2023.
In case, the Dated Brent average crude price equals or is more than $65/bbl, then EnQuest will pay $50m.
The Golden Eagle development began production in late 2014.
The project, which is operated by CNOOC International, also comprises two satellite fields, Peregrine and Solitaire.
The two fields are tied back to the Golden Eagle field’s facilities. Currently, the two fields are producing under depletion.
Golden Eagle is located approximately 111km northeast of Aberdeen, Scotland. The project includes six water injection wells, which have all been drilled on the Golden Eagle field.
CNOOC and partners have undertaken a four-well infill programme at the project, of which two wells had started production. The infill drilling programme is slated to be completed before the closing of the deal, which is expected to occur by the end of Q3 2021.
The acquisition gives an immediate incremental production of nearly 10 thousand barrels of oil equivalent per day (kboepd) to EnQuest along with net 2P reserves of around 18 million barrels (MMbbls) and net 2C resources of about 5MMbbls.
EnQuest chief executive said: “We are delighted we have agreed the acquisition of a material interest in Golden Eagle, a high-quality, low-cost UK North Sea development. Upon completion, this acquisition will add immediate material production and cash flow to EnQuest and will allow us to accelerate use of our substantial tax losses.
“It also demonstrates our continued commitment to the UK North Sea and diversifies our existing production base.
“The assets have a strong safety record and a lower than average CO2e emissions intensity ratio.”
The closing of the deal will be subject to approval from EnQuest’s shareholders, approvals of project partners, and consents from relevant regulators and third parties.