IAN Suttie has said his First Oil business is on the hunt for more acquisitions in an update which highlights the appeal of the North Sea.

The Aberdeen-based tycoon said First Oil was actively targeting acquisitions as it looked to maintain the rapid growth it had achieved in recent years.

First Oil, which describes itself as the largest private UK-owned producer in the North Sea, increased reserves by 18% in the year to April 30 to 34 million barrels oil equivalent, from 29 million at the end of the preceding period.

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The growth has left the company with a substantial resource base, which could allow it to capitalise on growing global demand for oil and gas. This has prompted a flurry of mergers and acquisitions in the North Sea as companies try to secure access to resources.

Writing in the company's latest accounts, Mr Suttie highlights the way in which First Oil used deal-making to potentially transformational effect in the year to April.

He said the company gained a "low cost" entry to the bumper Kraken find east of Shetland through the acquisition of the former Celtic Oil in June 2011.

Weeks later an appraisal well drilled on Kraken confirmed the potential for a development well to flow at 10,000 barrels oil daily. The company then farmed down half its 30% stake in Kraken to Enquest, which agreed to carry up to $144m (£90m) development costs. The acquisition will also allow First Oil to use £16m losses built up by Celtic Oil to reduce its tax bills.

First Oil made £18m profit in the year to April after recording a £17m tax credit in respect of its pool of tax losses.

The accounts show First Oil paid £13m to acquire subsidiaries during the year to April net of any cash it held.

The company also acquired a 14% interest in the Enoch field from Dyas, on which it invested around £5.7m. "Acquisition success and continued progress on our hopper of exploration and development opportunities has positioned us for an exciting 2012/13," wrote Mr Suttie.

"We anticipate a period of strong growth and in parallel will be actively targeting further acquisitions where we can identify upside potential."

The company recently agreed an increased £80m borrowing facility with BNP Paribas, Commonwealth Bank of Australia and Barclays. The company said the relevant lending model would support a borrowing capacity of more than £100m.

First Oil has developed a portfolio that includes stakes in 32 assets. These include 12 producing interests, six development assets and 14 exploration areas. The bulk are in the North Sea.

It was awarded five licences in the latest UK round.

First Oil produced an average 3005 barrels oil equivalent daily (boepd) in the latest year compared to 4060boepd the preceding year. The company said the fall was due to the delayed start of production from the Bacchus field.

It expects production to average 5000boepd-plus this year as a result of "significant" investment in production-enhancing opportunities.

Turnover fell to £53.2m from £71.2m. Pre-tax profit fell to £55,000 from £11.3m. The company charged £16m exploration costs in respect of the Fyne area assets.