Cairn Energy agrees to dispose its Norwegian business unit Capricorn Norge. Credit: © Cairn Energy PLC 2019.

Oil and gas exploration and development firm Cairn Energy has signed an agreement to dispose the entire share capital of Capricorn Norge in Norway.

Solveig Gas Norway will acquire all of the shares in the Norwegian unit for $100m. The company will also pay customary working capital adjustments upon completion of the transaction, noted Cairn.

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Capricorn Norge, which is the company’s wholly-owned subsidiary, owns 10% in the Nova field operated by Wintershall Dea. Furthermore, the company plans to drill two exploration wells in 2020. The proceeds from the transaction are intended to be used by Cairn to fund its ongoing business.

Cairn Energy chief executive Simon Thomson said: “This is a further attractive transaction for Cairn shareholders in line with our consistent strategy to realise value and redeploy capital within our portfolio.

“We continue to have a material business in the UK North Sea where production performance of the Kraken and Catcher assets remains strong.”

Expected to be completed in early 2020, the transaction is subject to written consent by the Norwegian Ministry of Petroleum and Energy. It is also subject to other third-party approvals. With the transaction, Cairn will have sold all of its assets in Norway.

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Solveig Gas Norway chairman Gunnar Olsen said: “This transaction is in line with the strategy of Solveig becoming an integrated, infrastructure based E&P operating company, combining its gas pipeline assets with exploration, ongoing and future developments and resulting production.”

For Solveig, the acquisition of Capricorn Norge is expected to provide production of about 6,000 barrels of oil equivalent per day from the Nova field upon commencement of production in 2021. The company will also act as an operator for exploration licenses in Norway.