Oil and gas producer Cairn Energy Plc is shifting its focus to a growth portfolio onshore Egypt from declining offshore fields in the British North Sea in a flurry of deals worth around $1.5 billion which it announced on March 9.
Cairn, with partner Cheiron Petroleum Corp., agreed to buy onshore fields in Egypt’s Western Desert from Royal Dutch Shell Plc for up to $926 million and sell its stakes in British fields Catcher and Kraken to private firm Waldorf Production for $460 million.
“We’re transitioning from that portfolio in decline into one where we see that we can build greater cash flow generation into the future,” Cairn CEO Simon Thomson told a conference call.
RELATED:
Shell to Sell Egypt Onshore Assets for up to $926 Million
Cairn, which produced around 21,000 bbl/d last year, can boost its net share from the Shell assets to 50,000 bbl/d from 35,000 bbl/d within a couple of years, Thomson added. The deal would triple Cairn’s reserves.
Around $280 million of the payment for the Egyptian assets depends on the oil price and exploration successes. The deal is subject to regulatory approval and expected to close in the second half of the year.
Cairn and Cheiron plan to pay for the fields with a new reserve-based lending facility of up to $350 million, a joint junior debt facility of $100 million and existing cash, Cairn said.
Cairn is also in talks with no set deadline with the Indian government about an arbitration award worth around $1.7 billion, but Cairn is actively pursuing alternatives, such as selling the consideration or enforcement, Thomson said.
Recommended Reading
Seatrium Awarded Contract for FPSO Bound for Guyana’s Stabroek
2024-05-17 - The topsides fabrication and integration contract will be for the FPSO Jaguar, bound for the Whiptail Field in the Stabroek block offshore Guyana for Exxon Mobil.
Third Suriname Find for Petronas, Exxon Could Support 100,000 bbl/d FPSO
2024-05-17 - A recent find offshore Suriname in Block 52 by Petronas and Exxon Mobil could support a 100,000 bbl/d FPSO development, according to Wood Mackenzie.
US Drillers Add Oil, Gas Rigs for First Time in Four Weeks: Baker Hughes
2024-05-17 - The oil and gas rig count rose by one to 604 in the week to May 17.
BPX Looks to Ramp US Production Over 60% by 2030
2024-05-16 - BPX Energy is looking to boost its U.S. production over 60% by 2030 as it considers bringing online a fourth processing facility in the Permian by mid-year 2025, Clark Edwards, the company’s vice president of development, said during SUPER DUG in Fort Worth.
Empire Petroleum’s Williston Drilling Program Identifies New Zones
2024-05-16 - Empire Petroleum provided updates on its Williston Basin development drilling program in its first quarter 2024 earnings results.