Cairn Energy has signed a farm-out agreement to divest 10% stake in the Nova development offshore Norway to ONE-Dyas Norge.

ONE-Dyas Norge will acquire the stake by paying $59.5m as consideration along with customary working capital adjustments on completion. The deal has an effective date of 1 January 2019.

Once the transaction is complete, Cairn will continue to retain a 10% participating interest in the Nova development. It will also reduce its capital expenditure to the end of 2021 in the Nova area by around $110m. The UK-based oil and gas company plans to invest the proceeds of the transaction to support its exploration and development activities.

The completion of the divestment is subject to multiple approvals including green light from the other partners of the project.

Located in the Norwegian North Sea, the Nova field primarily lies in PL418 with a part extending towards the south into PL378. As a result of the transaction, the partners in the Licences PL418/PL418B are Wintershall Dea (45%), Spirit Energy (20%), Edison (15%), Cairn (10%) and ONE-Dyas (10%).

In PL378, Wintershall DEA will hold 76% stake, while the remaining interest with be with Cairn (12%) and ONE-Dyas (12%). Both licences will continue to be operated by Wintershall DEA.

In 2018, the Norwegian Petroleum Directorate approved the Nova field development plan. The partners aim to recover first oil from the offshore resource in 2021.