HALO will acquire a 7.9% interest in the Sillimanite Development Unit, which straddles the Dutch & UK median line in the North Sea and 0.85% of the Joint Development Area (JDA).
Additionally, the company will acquire 2.34% of the Western Gas Transmission (WGT) pipeline system, including the onshore Den Helder gas processing facilities and 4.167% net profit interests on blocks in and around the JDA, from ONE-Dyas.
The planned acquisition would increase HALO’s interests in the JDA and WGT to 10.80% and 11.22%, respectively. ONE-Dyas will receive €8.85m ($9.73m) in cash from HALO, upon the closing of the agreement.
HALO intends to fund the amount through existing cash resources of the company, structured finance associated with the existing and expanded portfolio or secured lending against hydrocarbon gas volumes within its portfolio.
The proposed acquisition is subject to the approval of all requisite third party, regulatory and government authorities. Upon completion, it would add about 2mmboe of reserves and an estimated 800-1,000boepd of production by the fourth quarter of 2020 immediately.
Hague and London Oil chairman and interim CEO Andrew Cochran said: “This proposed acquisition represents a unique opportunity to add to the existing portfolio as well as expanding it within HALO’s established ‘core’ areas, including transportation & infrastructure.
“Sillimanite is already under development and would add materially to the company’s production profile next year as well as adding reserves immediately upon a successful closing; also, the proposed acquisition would establish HALO’s first production in the UK ahead of the Greater Pegasus Area development project.”
The Sillimanite Development Unit consists of 11.73% Block 44/and 7.037% Block D12b.