LONDON (Alliance News) - Faroe Petroleum PLC Friday said it has completed the acquisition of Roc Oil (BG Holdings) Ltd, increasing its stake in two UK gas fields.
Faroe struck a deal to acquire Roc Oil back in September, and through the deal Faroe has acquired Roc Oil's 12.5% stake in the Blane field and a 12% stake in the Enoch field, both in the UK North Sea.
Faroe already holds stakes in both fields, meaning that after the acquisition is completed it will hold a 30.5% non-operated interest in the Blane field and a 13.9% non-operated interest in the Enoch field.
Faroe has paid an initial consideration of USD17.0 million for the deal, but said this is reduced to USD13.7 million at completion after working capital and "other corporate adjustments," it said. When the deal was originally announced, Faroe said it would also make a deferred payment of USD3.0 million to Roc Oil depending on certain performance targets on the Blane field.
"We are very pleased to announce the completion of this acquisition, which gives a further boost to our oil and gas production portfolio," said Chief Executive Graham Stewart.
The Blane field is already producing, pumping out an average gross production of 4,070 barrels of oil equivalent per day in 2014 with average operating costs of USD17.7 per barrel of oil.
To put that operating cost into perspective, Brent oil was trading at above USD48 per barrel on Friday morning. The field is also considered to have "considerable upside potential" to increase production.
"Blane is a good quality producing field, well known to the company and which offers upside potential in the form of increasing reserves, production and field life. The transaction is also tax efficient, allowing us to accelerate the use of our tax losses in the UK and is in line with our strategy to grow our production portfolio and to continue the efficient funding of Faroe's committed exploration, appraisal and development programme," said Faroe.
The Enoch field is currently suspended and is planned to be brought back on stream but Farie said Friday this will be brought back on stream in the fourth quarter of 2015.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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