EnQuest PLC (together with its subsidiaries, ‘EnQuest’), an independent oil and gas production and development company listed on the London and Stockholm stock exchanges (ENQ.L and ENQ.ST), is pleased to announce it has signed a Share Purchase agreement (‘SPA’) with Whalsay Energy Holdings Limited (‘Whalsay’) to purchase their entire 100.00% equity interest in the P1078 licence containing the proven Bentley heavy-oil discovery.
This discovery is within c.15 kilometres of the Group’s existing Kraken and Bressay operated interests, offering further long-term potential development opportunities and other synergies. The transaction will be effected through the acquisition of Whalsay’s subsidiary, Whalsay Energy Limited (‘WEL’) which holds the licence as its only asset, on a cash, liability and debt free basis.
On completion, EnQuest will fund certain accrued costs and obligations of WEL, expected to amount to less than $2M. No other upfront consideration is payable. EnQuest will make deferred payments to Whalsay based on future revenues generated by WEL which are capped at $40M.
Completion of the transaction is subject to the satisfaction of a number of conditions precedent, including the UK Oil and Gas Authority granting an extension of the existing licence term, which is currently due to expire 30 June 2021, and the receipt of other third party approvals.
As at 31 December 2019, the date of the most recent audited accounts, WEL had gross assets valued at around $95M, consisting primarily of intangible assets representing historic capitalised exploration and evaluation activities on the Bentley licence. For the year ended 31 December 2019, WEL recorded a loss before tax of around $72M, primarily resulting from the recognition of an impairment charge against the Bentley licence.
Bentley is a heavy oil field in the UK North Sea located in 113 metres water depth, 15 kilometres east of the Kraken heavy oil field and 8 kilometres southeast of the Bressay field, both of which are operated by EnQuest. Bentley is one of the largest undeveloped oil fields in the UKCS with the current operator estimating stock-tank oil initially in place (‘STOIIP’) of c.900 MMbbls. The field was discovered in 1977 and has been appraised through the drilling and testing of 6 further wells and two sidetracks, including extended well tests in 2012 which delivered production rates of around 3,500 bopd and an average of around 2,600 bopd over a 68 day well test.
EnQuest is providing creative solutions through the energy transition. As an independent production and development company with operations in the UK North Sea and Malaysia, the Group's strategic vision is to be the operator of choice for maturing and underdeveloped hydrocarbon assets by focusing on operational excellence, differential capability, value enhancement and financial discipline. For more information, visit www.enquest.com.