North Sea oil firm Chrysaor will need bigger acquisitions to bolster a “declining asset base”, an analyst has said.
Fiona Legate, of Wood Mackenzie, said Chrysaor’s acquisition of stakes in three North Sea fields from Spirit Energy was a “prime example of getting assets into the right hands”.
Ms Legate, senior research analyst, North Sea Upstream, said Chrysaor would still be on the hunt for more deals.
She said: “This deal is a bolt-on to Chrysaor’s existing portfolio. We expect the company will still look to grow its portfolio both organically and inorganically.
“This private equity player has a declining asset base, with production dropping below 100 kboe/d by 2020.
“Our view is that larger acquisitions will be needed if the company is to monetise this portfolio in the near term.”
Ms Legate said it was “positive” that Chrysaor will invest in extending the life of the Armada cluster.
She said: “The fields produced 8.3 kboe/d in 2017 and the previous partners had planned to cease production this year.
“However, Chrysaor is planning to implement a late-life investment project. This is a prime example of getting assets into the right hands via M&A, which is positive for the UKCS.
“We assume the project will include further drilling, which is likely to be accelerated now Chrysaor is the sole owner of the assets.”
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