Assets acquired by Aberdeen explorer
Faroe acquires North Sea assets from Roc in $20m deal
Once complete the acquisition of Roc Oil (GB Holdings) will take Faroe’s holding in the Blane unit from 18% to 30.5% and its stake in Enoch from 1.86% to 13.86%. Enoch is currently suspended and there are plans to bring it back on stream pending resolution of technical and commercial issues.
The initial price is $17m with a further $3m payable on hitting performance targets. Roc GB had profits of $10.68m in the last year.
Blane was discovered in 1989, and is located on the Central Graben of the UK continental shelf, extending into the Norwegian sector. Production began in September 2007. The company says Blane is a low operating cost producing field with upside potential in the existing reserves and the potential for further in-fill drilling.
The Enoch field has been developed as a single well in the Brae field which was closed due to a leak at the subsea well-head, which has since been repaired, and the field is currently planned to be brought back on production this year.
The Acquisition is expected to complete before the year-end and is to be funded from cash and bank debt drawn against the company’s borrowing base facility.
Graham Stewart, chief executive of Faroe, said the acquisition increases its stake in the low cost, high quality and long field life Blane asset.
“Blane offers significant upside potential in the form of increasing reserves and production as well as in extending field life. The transaction is also very tax efficient for us, providing shelter for both past and future tax losses in the UK. We have at this stage chosen not to amend our production guidance for the year but will review this at the time of our Interim Results in September.
“Meantime, drilling operations on the Boomerang and Portrush prospects continue as scheduled, and the company will announce these results when drilling operations are complete, expected in September 2015.”