North Sea oil company Zennor Petroleum has entered into a Sale and Purchase Agreement with Mitsui E&P UK in respect of its interests in United Kingdom Continental Shelf Licences P.213, Block 16/26a, Area B and P.345 Block 16/27b Area B which represent an 8.97% working interest in the Britannia Field.
Completion of the transaction is subject to customary regulatory and partner consents.
The acquisition of the Britannia Field interest is strategic for Zennor given its 100% operated working interest in the nearby Finlaggan Field. Finlaggan is scheduled to be developed as a sub-sea tieback to the Britannia platform.
As notified in the Operations Update dated July 10th, 2018, Zennor is currently drilling two wells as part of the Finlaggan Field development. Further updates on Finlaggan are anticipated to be announced in the coming weeks.
The acquisition also fits with the recently announced 30th Offshore Licencing Round awards where Zennor was successful with several 100% operated awards in and around the Finlaggan and Britannia Fields. These awards include the Leverett Discovery in Block 21/03d, which may form a future potential tieback to the Finlaggan sub-sea infrastructure.
The effective date for the transaction, which doubles Zennor’s net production to circa 5,000 boepd is January 1st, 2018. As part of the transaction agreement, MEPUK will retain the majority of the decommissioning liability up to an agreed cap with Zennor being responsible for the balance.
Martin Rowe, Zennor’s Managing Director, 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."