EnQuest has completed the previously announced acquisition of an initial 25% interest in the Magnus oil field in the North Sea from BP.
The acquisition also involved a 3% interest in the Sullom Voe Oil terminal and supply facility (SVT) and additional interests in associated infrastructure from BP.
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Following the completion, EnQuest is now the operator of both SVT and Magnus.
Initially announced in January this year, the acquisition involved a consideration of $85m and adds 15.9MMboe of net 2P reserves and net production of 4.2Mboepd to EnQuest’s portfolio.
At the time of announcing the deal, EnQuest CEO Amjad Bseisu said: “This transaction capitalises on EnQuest’s strengths in realising value from the management of maturing oil fields, as underlined by BP’s confidence in proposing a change of operatorship to EnQuest.
“Magnus is a good quality reservoir; it has large volumes in place, with potential for infill drilling and for the revitalisation of wells, and scope for field life extension.
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By GlobalData“It is a producing asset that would materially increase EnQuest’s reserve base.”
EnQuest funded the acquisition by deferred consideration payable from the cash flow of the transaction assets.
Additionally, EnQuest has an option to acquire BP’s remaining 75% interest in Magnus, a further 9% interest in SVT and the remaining BP’s stake in the associated pipelines for a base consideration of $300m.
The option must be exercised between 1 July next year and 15 January 2019.
It also reserves the option to receive an additional $50m from BP for carrying out the management of the physical decommissioning activities for Thistle and Deveron fields, as well as making payments by reference to 6% of their gross decommissioning costs.
