North Sea explorer Tullow Oil has agreed the sale of two of its UK Continental Shelf (UKCS) assets to Faroe Petroleum in a deal worth more than £75million.
The transaction covers a 53.1% interest in Tullow’s Schooner field and 60% interest its Ketch asset in the Southern North Sea, with $58m to be paid upfront by Faroe.
The remaining sum will be payable upon reaching production milestones, while Tullow will also receive royalty on future Schooner developments.
The company continues to market its remaining UKCS and Dutch assets as it looks to pay off some of its soaring debt. The firm launched a major fundraising bid earlier this month after seeing its profits after tax fall 68% last year to £130million.
“Schooner and Ketch have been critical to Tullow’s success and growth since they were acquired in 2005,” said Aidan Heavey, chief executive of Tullow Oil.
“However, we have a clear strategy of constant and active portfolio management and have focused our business on conventional light oil.
“Sales and farm-down processes continue across Tullow and, although transactions are taking longer than initially expected, we are making good progress in tough but improving market conditions.”
The deal with Faroe follows the sale of Tullow’s gas assets in Bangladesh and the agreement to sell the Pakistan business in 2013, due to be finalised soon, Tullow said in a statement.
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