Acquisitive Viaro Energy has provided a further sign that deep-pocketed investors see value in North Sea assets even as some big fish howl about the impact of the windfall tax on the area.
Viaro has agreed to buy into acreage containing four gas fields from Australia’s Hartshead Resources in a deal that puts a valuation of up to £105 million on the stakes involved.
Hartshead said the deal could pave the way to the firms investing £350m in total in a first-phase development that would involve bringing two fields that were shut down in 2015 back into production.
If things go to plan Hartshead and Viaro could develop two other existing discoveries in the area.
READ MORE: Oil traders are going large on the North Sea amid the windfall tax furore
Both firms highlighted the commercial appeal of North Sea gas assets amid the spike in commodity prices since Russia launched its full-scale invasion of Ukraine in February last year.
This has encouraged the UK Government to try to boost North Sea output to reduce the country’s reliance on imports.
Hartshead told investors the field developments it is eyeing would be “leveraged to highly-attractive UK gas prices”.
Viaro, which developed out of a London-based oil trading business, has built a significant North Sea business helped by the acquisition of a £120m portfolio from Scottish energy giant SSE in 2020.
READ MORE: Newcomer offers ray of light as Covid-19 fallout takes toll on North Sea oil and gas industry
Viaro said it was committed to growing its UK North Sea portfolio and to supporting the country’s energy security drive.
Hartshead also noted that interest in North Sea gas assets has been stoked by the significant investment allowance the Government introduced alongside the windfall tax, which the Government has called the Energy Profits Levy. The firm noted the “super-deduction” concerned allowed firms to set 91.4 per cent of expenditure North Sea developments against their tax bills.
The deal between Viaro and Hartshead was announced as one of the heavyweights that have been generating huge amounts of cash in the North Sea hammered home warnings the windfall tax would force it to complete a painful retrenchment in the area.
READ MORE: North Sea giant's boss set for multi-million pound share awards as Aberdeen job cuts loom
Harbour Energy has confirmed well-trailed plans for hefty jobs cuts saying 350 onshore posts will go in the UK following a review, out of a “baseline” of 1,200. Aberdeen looks set to bear the brunt of the cuts.
A spokesperson for Harbour noted: “When we announced the review in January, we said that as a result of the energy profits levy, which results in an effective tax rate of 75% in the UK regardless of the level of oil and gas prices in the market or realised, we have had to reassess our future activity level in the UK.”
Landmark building to reopen as cocktail lounge and restaurant
A landmark Glasgow building to reopen as a cocktail lounge and restaurant.
Hutchesons' Hall was built between 1802 and 1805 and served as a hospital, to replace the original which was demolished in 1795.
Jewellery giant to open in Scottish shopping destination
A Glasgow city-centre shopping complex is to welcome a new store by popular jewellery brand Pandora.
As part of the brand’s wider expansion plans, the Danish jewellery giant will open its fifth Glasgow store in St. Enoch Centre on Thursday.
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