NORTH Sea-focused Enquest is set to continue its push for growth in the area after agreeing an acquisition that could involve an outlay of around £100 million
The independent has agreed to acquire a 50% stake in the Greater Kittiwake area fields around 100 miles north-east of Aberdeen from Centrica in a deal that will add 4.7 million barrels oil equivalent to its reserves.
The acquisition is the second that Enquest, headed by Amjad Bseisu, has agreed in the North Sea in the space of three months. The company believes the acreage acquired from the Scottish Gas owner should provide ideal ground in which to follow its strategy. This involves trying to boost production from mature assets in which bigger fish may not want to invest in areas where it believes more oil and gas could be found.
"This acquisition fits within our goals of managing mature fields, and of exploiting nearby discoveries and near field exploration opportunities," said chief executive Mr Bseisu.
Enquest highlighted the fact that the production facilities used for the Greater Kittiwake fields lie close to the company's Scolty and Crathes discoveries.
The company may hope to cut the cost of bringing these into production by connecting them to the Kittiwake platform, which may enjoy a longer life as a result.
Enquest also signalled it believes there is the potential to make more big finds on the acreage.
The deal involves assets which Centrica acquired through the £1.3 billion takeover of Scotland's Venture Production in 2009.
The giant utility said the disposal formed part of its plans to fine tune its North Sea portfolio .
Colette Cohen, senior vice-president UK and the Netherlands, said: "This divestment is part of Centrica's strategy to optimise its North Sea portfolio, investing in assets with a link to its existing hubs while looking to divest non-core assets".
Announcing plans to extend the life of the Chestnut field in the central North Sea last month, the company said its UK operations would continue to play an important part of its "success story".
Subject to regulatory consent, the acquisition will be the 16th completed by Enquest in the North Sea. In August, the company announced it generated around £150m from its operations in the six months to June.
The company also said it was buying a 50% stake in the Avalon prospect in the North Sea. It agreed to pay up to £12.5m of the costs of a planned well and a 50% share of other expenses.
Enquest has agreed to acquire Centrica's entire 50% share of the Greater Kittiwake Area assets for $39.75m (£25m). These include the Kittiwake, Mallard, Gadwall, Goosander and Grouse fields. It will also aqcuire Centrica's 100% interest in the Kittiwake to Forties oil export pipeline for $5.2m, including debt that it will assume.
Enquest will pay up to $30m if the Government approves a field development plan that involves tieing the Scolty or Crathes fields back to the Kittiwake platform.
Enquest said further contingent consideration of up to $100m will be payable subject to future exploration success in two defined prospects in Block 21/19.
Analysts at Bank of America Merrill Lynch said they expect Enquest's huge Kraken project off Shetland to be sanctioned in the next couple of months.