A prominent North Sea-focused oil and gas firm has said it is on the hunt for acquisitions in the area amid the fallout from the crude price plunge and highlighted the potential of big prospects on its acreage.

While the North Sea oil and gas industry is facing the threat of a deep downturn, Cluff Natural Resources reckons the upheaval in prospect will create openings for firms that have strong balance sheets.

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“The current situation provides a window of opportunity that the Company will look to capitalise on,” said the firm.

It made the comment on a day the outlook for prices worsened. Hopes that major oil exporters would extend the record production curbs they agreed in April to support the market faded amid reports of disagreements between some countries.

However, the approach Cluff Natural Resources plans to take may fuel hopes that independents could help limit the impact of the fall in prices this year on activity in the North Sea.

Some relatively small firms played a big part in helping the North Sea industry to stage a recovery from the downturn triggered by the sharp fall in oil prices from 2014 to early 2016. This came after they bought assets that bigger fish decided to offload to free up funds to invest in other areas.

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Cluff Natural Resources said the opportunities it expects to be created by the current price environment include the disposal by larger operators of producing assets or entire portfolios.

It said: “The Company proposes to actively identify opportunities, including stakes in producing assets across the North Sea which have the potential to deliver significant free cash flow, and potentially contribute to drilling costs, as commodity prices recover.”

The company reckons cuts in the prices of exploration services could help reduce the financial risks associated with drilling. Services firms cut prices during the last downturn.

Industry leaders have warned that exploration activity levels could hit a fresh low following the latest oil and gas market turmoil.

However, Cluff Natural Resources and Royal Dutch Shell remain fully committed to drilling the Pensacola and Selene prospects in the Southern North Sea.

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Cluff Natural Resources turned heads last year when it persuaded Shell to buy in to the licences containing the prospects and to fund work on them.

Drilling on the 50 million barrel oil equivalent Pensacola prospect is expected to start next year.

The timetable for the start of drilling on Selene has slipped to 2022 “in light of the current investment environment”.

Cluff Natural Resources said it is still engaged with some established operators in relation to the potential sale of stakes in the Dewar oil prospect off Scotland.

“The Board believes that there will be significant interest in this asset when the oil price improves,” said the company.

Shareholders approved a proposal to change the company’s name to Deltic Energy at its general meeting yesterday.

The company was started in 2012 by a pioneer of North Sea exploration, Algy Cluff

A former Grenadier Guards officer, Mr Cluff founded the firm that discovered the Buchan field in the North Sea in 1975. He stepped down from the chief executive’s role at Cluff Natural Resources in February 2018 and was succeeded by Glasgow university graduate Graham Swindells.

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Brent crude sold for $39.73 per barrel yesterday afternoon, down $0.06/bbl on the day.

The price rose above $40 briefly on Wednesday, for the first time since March. The price has increased from the 18-year-low of $15.98/bbl it reached in April following the record production cuts agreed by the Opec+ grouping and the easing of lockdown measures in some countries.

The scale of the cuts is due to reduce from June 30. It had been hoped Opec+ members would decide yesterday to leave the cuts unchanged for some months.

Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB, said: “There is a better than even chance for Opec+ rolling production cuts beyond June 2020, but a final decision will probably not be available before mid-June as the group struggles with how to whip cheaters into line.”

Brent crude sold for around $70/bbl in January.