By Ron Bousso, Shadia Nasralla and Dmitry Zhdannikov
LONDON, Jan 31 (Reuters) - North Sea private equity-backed
Chrysaor's talks to buy smaller regional rival Siccar Point have
ended after a large gap between their price expectations, three
sources close to the process said.
The breakdown in negotiations highlights difficulties oil
and gas producers are facing with the long-term outlook for
prices uncertain as economies shift away from fossil fuels.
Chrysaor offered around $1.6 billion to acquire Siccar Point
in the second bidding round on Jan. 13, the only bid to acquire
the entire company which is backed by private equity firms
Blackstone and Blue Water Energy, the sources said.
Siccar Point's owners are seeking around $3 billion, but a
drop in oil and gas prices in recent months and a weak outlook
for prices, particularly for natural gas, have led bidders to
lower their offers, the sources said.
Siccar Point also had bids from a number of buyers to
acquire parts of its assets. It was not immediately clear if any
offers will be accepted.
Siccar Point, Blackstone and Chrysaor declined to comment.
EIG-backed Chrysaor became the North Sea's largest producer
after acquiring large portfolios from Royal Dutch Shell
in 2017 and ConocoPhillips last year.
Siccar Point became a major North Sea player after acquiring
OMV's portfolio for $870 million in January 2017. Its owners
have not disclosed how much they have since invested.
With around 600 million barrels of oil equivalent (boe) in
resources and reserves, Siccar Point expects its output to reach
about 80,000 barrels of oil equivalent per day (boed) by about
2027 from just over 10,000 boed currently, mostly through the
development of major new fields.
(Reporting by Ron Bousso;
Editing by Alexander Smith)
