Tullow Oil is set to acquire Norway’s SPRING Energy and dispose of assets in the UK and Dutch Southern North Sea (SNS) gas basin, as part of its active portfolio management strategy to monetise non-core assets and augment its exploration portfolio.

The UK-based oil major has entered into an agreement to acquire Spring Energy, effective from 1 September 2012, for a purchase price of $372.3m, which will be adjusted towards working capital needs.

"Tullow intends to sell its gas exploration, development and production assets in the UK and Dutch Southern North Sea (SNS)."

In addition, a bonus payment arrangement, limited to four specific prospects, has been worked out in case of commercial success, wherein the vendors will be paid a maximum of $150m per prospect, with an aggregate ceiling of $300m.

The acquisition is subject to approval from Norway’s ministries of energy and finance.

Spring Energy holds 28 offshore licences in the Norwegian Continental Shelf, Norwegian Sea and Barents Sea, encompassing an area of more than 18,000km².

Of the 12 exploration wells drilled since 2008, Spring Energy has made six discoveries and has firmed up plans to drill another 16 wells during 2013-14.

As assessed by Tullow, the target company’s portfolio contains 230 million barrels of oil equivalent (mmboe) of risked prospective resources and has existing reserves and resources of 24mmboe.

The pre-qualification of Tullow as an operator on the Norwegian Continental Shelf in early 2012 and the current acquisition of Spring, with which it has jointly applied for licences in Norway’s 22nd round of bidding, bode well for the company’s future growth plans.

As part of its active portfolio management strategy, Tullow intends to sell its gas exploration, development and production assets in the UK and Dutch Southern North Sea (SNS), by the end of 2013.

Though these assets produce about 18,000 boe a day and have been key contributors during the past decade, the company opines that these are now non-core to the group following successes in Ghana, Kenya and Uganda, and do not fit into its light oil-focused portfolio.

Tullow Oil chief executive, Aidan Heavey, said that the transactions are part of process of refocusing the company’s business, monetising non-core assets and reinvesting proceeds into high potential oil exploration.

"Our Southern North Sea gas assets are therefore no longer core to Tullow’s business which has a clear focus on light oil in Africa and the Atlantic Margins," added Heavey.

"The acquisition of Spring adds a material portfolio of oil exploration assets and high quality people that will provide a superb foundation for building our portfolio and expertise in the highly prospective North Atlantic."