New Aberdeen-based oil and gas company DEO Petroleum, set up last year to seek acquisitions of North Sea assets, announced its first deal yesterday.
DEO is to pay £10.5million to Nexen Petroleum for a 42.08% stake in certain licence areas in the UK central North Sea known as the Perth Assets.
The company also said it had placed shares to raise £16million before expenses and expected re-admission to trading on the Alternative Investment Market today following a short suspension.
Cash available after the buy from Nexen will be used to produce and obtain government approval for a field-development plan for the Perth Assets and to provide further working capital.
Chief executive David Marshall, a Scot with 30 years’ experience in the oil and gas sector, said: “This is an exciting time for DEO as we make our first acquisition.
“We have a proven and experienced management team who have successfully developed and commercialised North Sea assets in recent times. By applying advanced subsea technology and first-class drilling operations to stranded assets we aim to become the leading independent operator of high-value subsea developments in the central North Sea.”
The assets being acquired lie about 115 miles north-east of Aberdeen. The areas are referred to as: Perth Core, Perth North, Perth Beta Terrace and Perth Beta East.
Total contingent resources of 20.6million barrels of oil equivalent have been identified for an initial Perth Core area development, which has been assessed independently as having a 60% chance of commerciality.
Partners in the area are Petro-Canada UK (43.33%), Maersk Oil UK (10.84%) and Atlantic Petroleum UK (3.75%). Dana Petroleum has an agreement to acquire Petro-Canada UK’s interest.
As part of the 15/21b and 15/21a licences being purchased, DEO will also acquire a 42.08% interest in the Dolphin, Sigma and Gamma Central discoveries, all within tieback distance of the Perth Assets.
DEO’s senior management – Mr Marshall, director and general counsel Richard Mays, a former law professor at Robert Gordon University and depute dean of the Aberdeen Business School, vice-president of engineering Michael Coulthard and vice-president of operations Adrian Jones – were all previously with Oilexco North Sea.
Vedanta’s proposed deal to buy a large stake in Cairn India came a step closer yesterday as shareholders of parent Cairn Energy overwhelmingly approved the sale, which could be worth up to £5.5billion.
The Indian government has said it will decide on whether to approve the sale by the end of this year.
Cairn plans to return most of the sale proceeds to shareholders and spend the rest on exploration in Greenland.