Verus Petroleum has agreed the purchase of Japanese-owned Cieco Exploration & Production (UK) which has holdings in the Western Isles Development Project – including the Harris and Barra oil fields – and the Hudson field.
The deal will add around 11,000 barrels of oil equivalent per day (boepd) to Verus’s daily production and it will also gain stakes in the Brent pipeline system and the Sullom Voe oil terminal.
Part of the funding package for the deal is being provided by Stavanger-based private equity firm HitecVision which is the majority owner of Verus.
Alan Curran, chief executive of Verus Petroleum, said the deal was in line with the company’s strategy to expand its production base and cash flow.
He highlighted the Western Isles asset in particular for its long future and strong cash generation.
The Western Isles development includes the Harris and Barra oil fields. Production has exceeded expectations since it started in November 2017 and is currently producing around 40,000 boepd, with an estimated field life of 15 years.
“This transaction builds on our Boa oil field acquisition in 2017 and our acquisition of interests in the Alba oil field and the Babbage gas field earlier this year. The combined Alba, Babbage and Cieco acquisitions increase our net production to around 18,000 boepd,” Curran said.
The transaction is subject to regulatory approval and is expected to complete in the fourth quarter of 2018.