North Sea-focused oil and gas producer EnQuest Plc has hired investment bank Jefferies to advise on a sale of a 20% stake in its recently started Kraken Field, according to a document seen by Reuters.
The sale could fetch as much as $400 million for EnQuest, based on recent analyst valuations of the field. EnQuest holds a 70.5% stake in Kraken where production is expected to ramp up to 50,000 bbl/d by mid-year following its startup last June.
EnQuest declined to comment.
EnQuest has previously sought buyers for a stake in its flagship $2.5 billion development to help with its costs, but talks with Israeli conglomerate Delek Group failed in 2016. The heavily indebted company, headed by CEO Amjad Bseisu, is hoping to attract more interest now that the field is up and running.
The recent sharp rise in oil prices to about $70/bbl, levels not seen since 2014, is anticipated to spur further interest, banking sources said.
EnQuest’s lenders in November agreed to ease the terms of its loans as it struggled with a debt of about $2 billion compared with a market value of about $680 million. In the sale document, EnQuest, which specializes in extending the life of aging fields, said it intended to open a data room in January and set a deadline for bids in March or April.
Analysts at Barclays in December valued EnQuest’s 70.5% stake at about $1.4 billion while Jefferies analysts valued it at about $1.3 billion. Cairn Energy owns the remaining 29.5% in the Kraken Field.