Oil and gas firm EnQuest is increasing its stake in the Kraken oil discovery in the UK North Sea to 60%.
Under the agreement with First Oil, EnQuest will acquire a further 15% interest in two blocks 9/2b and 9/2c, including the Kraken oil discovery in the East Shetland basin.
The company will pay between $90m and $144m to First Oil for its remaining shares in the discovery.
EnQuest’s cash payments will be deferred and the firm will be entitled to receive the capital tax allowances normally available for investment in such a development project.
Enquest chief executive Amjad Bseisu said: "EnQuest is pleased to increase further its interest in Kraken, we are enthusiastic about its potential. As with our purchase of a 25% interest from Nautical and based on the maximum carry, the cost per barrel to EnQuest is $6/bbl before tax effects and approximately $2.40/bbl post tax effects.
"EnQuest’s execution team is now leading this development and is taking on operatorship earlier than previously planned; we are combining forces with partners with deep expertise in this project. EnQuest is moving forward one of the most exciting development projects in the UK North Sea."