Zennor Petroleum has agreed to acquire a stake of 8.97% held by Mitsui E&P UK (MEPUK) in the Britannia field located in the UK part of the North Sea for an undisclosed price.
The acquisition to be carried out by the company’s subsidiary Zennor North Sea in the Britannia Field, covers the interests of MEPUK in the P.213, Block 16/26a, Area B and P.345 Block 16/27b Area B licenses.
MEPUK had bought the stake in the Britannia Field alongside a stake of 13.3% stake in the Alba Field in the UK North Sea from BP for $280m in 2012.
Zennor Petroleum considers the acquisition of the stake in the North Sea field from MEPUK to be a strategic one considering that its 100% operated Finlaggan Field, is located nearby.
The UK-based oil and gas company plans to develop the Finlaggan Field as a sub-sea tieback to the Britannia platform. Currently, the company is drilling two wells for the development of the Finlaggan Field.
Zennor Petroleum said that the transaction with MEPUK aligns with the 30th Offshore Licencing Round awards where it had bagged multiple 100% operated awards near the Finlaggan and Britannia Fields. Included in these is the Leverett Discovery located in Block 21/03d, which the company believes can form a potential tieback to the Finlaggan sub-sea infrastructure in the future.
Zennor Petroleum managing director Martin Rowe said: “We are delighted with this acquisition which is directly aligned to our Finlaggan project and wider corporate strategy.
“Creating core infrastructure hubs to deliver cost effective production is central to our approach. The ability to leverage the Britannia infrastructure will provide Finlaggan and the wider portfolio acquired in the 30th Round with a cost effective, fast-track route to production.”
The entry of Zennor Petroleum in the Britannia Field is also expected to double the company’s net production to 5,000 boepd.
As per the terms of the deal, MEPUK will retain most of the decommissioning liability up to an agreed cap with Zennor Petroleum taking up responsibility for the balance.
The closing of the deal will be based on customary regulatory and partner consents.