$1bn deal sees North Sea firm scale up its interests

The North Sea's biggest deal of the year so far has seen an Aberdeen-based private equity-backed firm buy a string of assets in a transaction worth up to $1 billion (£810m).

Cash-rich private equity firms are keen to snap up assets in the North Sea. Picture: Danny Lawson/PA Wire
Cash-rich private equity firms are keen to snap up assets in the North Sea. Picture: Danny Lawson/PA Wire

Siccar Point Energy has bought the UK arm of Austrian energy group OMV which includes sizeable stakes in a number of producing fields and discoveries. The deal is seen as further evidence that cash-rich private equity companies are keen to snap up assets in the depressed North Sea.

It is the second deal in four months by Siccar, backed by funds managed by Blue Water Energy and Blackstone Energy Partners and headed up by Jonathan Roger, who previously ran Centrica’s oil and gas unit and launched Siccar in 2014.

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Under the deal announced with OMV, Siccar will acquire a portfolio concentrated in the West of Shetlands region and which includes an 11.8 per cent interest in the Schiehallion oil field and a 20 per cent interest in the Rosebank field.

Other assets include a 5.6 per cent interest in the producing Jade field and several West of Shetland discoveries. Siccar previously acquired an 8.9 per cent interest in the Greater Mariner Area, including the Mariner oil field, in August.

Roger, who was chief operating officer of Aberdeen-based Venture Production before it was acquired by Centrica, said that OMV UK was a good strategic fit for Siccar given the “scale, diversity, and quality of its asset portfolio”.

“This acquisition turns Siccar Point into a full-cycle oil and gas company with a substantial and high-quality UK North Sea portfolio. We are very excited about this next stage in the company’s growth.”

Mustafa Siddiqui, managing director at Blackstone, said: “The combination of low-cost production in the near term from Schiehallion and long-term growth from the development of its other assets is very attractive, especially in the hands of a very capable management team with strong capital backing.”

Under the deal, Siccar will pay an initial sum of $750m to OMV, with an additional $125m dependent on a final investment decision being taken on the Rosebank project, which is headed by Chevron. The agreement also includes a $125m payment for capital expenditure.

The deal is expected to complete in the first quarter of 2017. OMV has said it will take a loss on the sale of around $500m although some of that figure will be offset by foreign exchange gains.