Canadian energy company Sterling Resources announced that it will be selling its UK subsidiary, SRUK Holdings to the Netherlands-based Oranje-Nassau Energie (ONE) for a consideration of $163m.

The transaction is expected to close this May and Sterling Resources estimates of making net proceeds of $113m from the transaction.

Sterling's board of directors continued to see potential M&A opportunities following the completion of the company’s recapitalization on 30 May 2016.  The pursuit resulted in the Sterling offering its UK subsidiary to ONE. 

Sterling board of directors the chairman Jake Ulrich said: “Following a careful review of the Transaction by the board of directors, in consultation with our financial and legal advisors, we believe that this Transaction represents excellent value and is in the best interests of the Sterling shareholders.”

Oranje-Nassau Energie is a privately-owned oil and gas company, with investments in upstream projects. It currently holds an extensive North Sea portfolio after acquiring Sean gas field in 2015.

The transaction with Sterling along with its non-operated position in Gabon is expected to increase ONE’s long term production to over 25,000 barrels of oil per day.

ONE is financially backed with a $340m reserve based lending facility with ING, ABN AMRO, BNP Paribas, Crédit Agricole – CIB and Commonwealth Bank of Australia as well as a €50m Term Facility arranged by NIBC Bank.

Oranje-Nassau Energie CEO Alexander Berger said: “I am very pleased to announce that ONE has reached an agreement with Sterling which, as with the SEAN acquisition from Shell and Esso, will substantially grow our UK footprint and adds another high quality long term gas asset to our portfolio.

“Since ONE was acquired in 2009, production has increased fourfold and this deal makes a significant step towards reaching our longer term 150 million barrels of oil equivalent reserves target. The transaction will be funded with support from ONE’s two lender groups.