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EnQuest, an oil and gas production and development company, has signed an agreement to acquire Suncor Energy UK’s complete 26.69% non-operated equity interest in the Golden Eagle area for an initial consideration of $325m.

The Golden Eagle area, which is operated by CNOOC, consists of the producing Golden Eagle, Peregrine and Solitaire fields.

As per the deal, EnQuest has agreed to purchase 100% of the shares in North Sea (Golden Eagle) Resources, a new firm that, upon completion of the deal, will hold Suncor’s non-operated equity interest in the Golden Eagle area.

Additional contingent consideration of up to $50m will be made in H2 of 2023. This payment is conditional; if the dated Brent average crude price equals or exceeds $55/bbl between July 2021 and June 2023, then $25m will be paid, or if the dated Brent average crude price equals or exceeds $65/bbl, then $50m will be paid.

The deal adds an immediate incremental production of c.10 kboepd, c.18 MMbbls to net 2P reserves and c.5MMbbls to net 2C resources.

EnQuest intends to fund the deal through a combination of a new secured debt facility, interim period post-tax cash flows, and an equity raise.

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It is anticipated the new secured debt facility, which the group is currently working on with its lending banks BNP and DNB, will incorporate the refinancing of the current outstanding senior credit facility.

Further, the firm expects to raise up to $50m of equity through a placing and open offer.

The firm expects significant remaining development potential, with anticipated field life extending into the early 2030s.

At present, a four-well infill drilling programme is ongoing, with two of the four wells onstream.

This programme is scheduled to finish prior to the deal’s completion, which is expected no later than the end of Q3.

Several unsanctioned activities linked with further sub-sea and platform infill drilling, topsides water debottlenecking and an active well intervention programme are being evaluated.

EnQuest CEO Amjad Bseisu said: “We are delighted we have agreed the acquisition of a material interest in Golden Eagle, a high-quality, low-cost UK North Sea development. Upon completion, this acquisition will add immediate material production and cash flow to EnQuest and will allow us to accelerate use of our substantial tax losses. It also demonstrates our continued commitment to the UK North Sea and diversifies our existing production base.

“The assets have a strong safety record and a lower than average CO2e emissions intensity ratio. We look forward to a productive partnership with the operator, CNOOC and our future joint venture partners, NEO Energy and ONE DYAS.”