NORTH Sea-focused Viaro Energy is buying into more acreage in a deal worth up to around £105 million and has underlined its appetite for more acquisitions in the area.

Led by Italian entrepreneur Francesco Mazzagatti, Viaro has used takeovers to build a significant North Sea business. It said this has been performing well amid the surge in oil and gas prices fuelled by Russia’s war on Ukraine.

Viaro’s latest deal will see it acquiring stakes in two gas fields that were shut down in 2015, from Australia’s Hartshead Resources. The firms plan to bring the fields back into production to help meet strong demand, as the UK Government tries to cut the country’s reliance on imports.

Viaro also noted the potential to develop two other fields and make further finds on the licence concerned.

In a presentation to investors, Hartshead said the planned first phase development could involve around £350m total investment. It reckons the partners in the project could expect to capitalise on “highly attractive” UK gas prices.

Viaro’s move flies in the face of claims by industry leaders that the introduction of the windfall tax on North Sea firms’ profits last year could lead to big cuts in investment in the area.

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“This deal further proves our commitment to growing our portfolio in the North Sea basin and to the energy security of the UK,” said Mr Mazzagatti, who added that Viaro has more deals in the pipeline for this year.

In its presentation, Hartshead noted that the deal reflected strong investor interest in North Sea assets with development potential. It said this had been boosted by the generous investment allowance that the Government introduced alongside the windfall tax.

“Existing Gas producers are actively seeking investments in developments to take advantage of the allowance,” said Hartshead.

The Government says this allows firms to benefit from a 91p tax saving for every pound they invest.

Regarding the plan to bring the Anning and Somerville finds back into production, Mr Mazzaggatti said modern production technology could be used to transform the economics of such fields.

He said:“It is easy to discard mature fields, but there are significant opportunities that come with introducing new energy developments to traditional gas exploration.”

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He said Anning and Somerville are expected to return to production late in 2024, with Viaro’s share of the output expected to be around 12,000 barrels oil equivalent daily (boed).

Viaro produces 25,000 boed to 30,000 boed currently.

Mr Mazzagatti took Viaro into the North Sea exploration and production business as the industry grappled with the impact of the pandemic, after developing successful oil trading operations.

In July 2020 Viaro clinched the £248m acquisition of RockRose Energy, which Andrew Austin developed through acquisitions.

Five months later Viaro bought a £120m portfolio from SSE. This included a stake in the giant Laggan gas development off Shetland.

In March Viaro bought West of Shetland-focused Spark Exploration for an undisclosed sum. Viaro highlighted plans to develop the Tuck find on Spark’s acreage, which could involve £200m investment.

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It has acquired a 60 per cent stake in Production licence P2607 in the Southern North Sea from Hartshead Resources, which retained a 40% interest.

Viaro said the Anning and Somerville fields were both discovered in 1969. Somerville came onstream in 1999 and Anning in 2008.

A second phase development would be expected to focus on the Hodgkin and Lovelace fields.

Hartshead’s chief executive Chris Lewis has run oil and gas operations in Europe and Africa. The company was awarded the P2607 licence in the 32nd UK offshore licensing round in 2020 after spotting the potential to develop relatively small fields in groups rather than individually.

Hartshead has had talks with Shell about the potential to use the giant’s Southern North Sea production infrastructure in connection with developments.

Its shares are listed on the Australian Securities Exchange.