Onshore energy firm IGas has made a move into the North Sea after striking a deal to buy Caithness Oil – and the Moray Firth licences it has stakes in.
Caithness Oil are set to take on 100% of the licences for Knockinnon, Lybster and a further onshore exploration licence from Trapoil, at a cost of $7.5million.
But the deal will only go ahead if IGas completes a deal with Caithness’ owners to buy the firm outright for £8.95million, giving it 100% of the company’s licences subject to approval.
“I am pleased we have managed to secure this opportunity to increase our existing production and one that offers significant upside potential,” said IGas chief executive Andrew Austin.
“The transaction is in line with our strategy to grow our production base in order to fund our exploration activities and to take advantage of accretive acquisition opportunities.”
IGas’s focus so far has been natural gas and oil delivery at onshore locations in Wales, the Midlands and southern England, with the Caithness deal marking its first move into the North Sea.
The Libster field, discovered in 1996, was producing 200boed and 2m square cubic feet of gas per day, with oil transported and sold to facilities at the Nigg yard.
Trapoil had acquired the stakes as part of its takeover of Reach Oil and Gas two years ago, before striking equity swaps with Caithness last year.
“In light of Caithness’ anticipated exit from the North Sea region and the fact that they have had limited finances to apply to the development of the licence interests, I am pleased that this transaction will, on completion, provide the Company with share consideration to the value of $7.5million,” said Trapoil chief executive Mark Groves Gidney.
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