EnQuest (LON:ENQ), the North Sea focused oil and gas group that was spun out of Petrofac (LON:PFC) and Lundin Petroleum in April, is set to buy Canadian company Stratic Energy Corp (LON:SE.) in a deal that values Stratic at US$45.7m (£28.7m). EnQuest, which is listed on London’s FTSE250 index and the OMX Nordix index already holds interests in the Thistle, Deveron, Heather, Broom, Don Southwest, and West Don fields of the North Sea and has interests in 16 production licences covering 26 blocks or part blocks, 15 of which it operates. The acquisition of Stratic will increase its North Sea proved and probable (2P) reserves by 7.27m barrels of oil equivalent. The purchase price equates, adjusted for tax, to paying US$11.2 per barrel of 2P reserves.

In particular, the addition of Stratic’s assets will consolidate EnQuest's 27.7% position in West Don with an additional 17.25% working interest, which is estimated to increase its production by approximately a net 900 barrels of oil per day. It will also provide EnQuest with a substantial 19% interest in the Crawford field development. In its interim management statement dated 17 May 2010 EnQuest re-affirmed that it was on track to produce approximately 18,000 barrels of oil per day in 2010.

As part of the deal, Stratic shareholders will receive 0.089626 EnQuest shares per Stratic share – equating to an offer price of 17.00 Canadian cents per share. EnQuest will refinance Stratic’s US$74.7 million net debt and has agreed with the providers of its existing $280m committed banking facility to increase the facility size by $70m.

EnQuest’s chief executive Amjad Bseisu said: “I am delighted to announce EnQuest's first acquisition since our listing in April. The acquisition of Stratic is in line with our strategy to deliver sustainable growth in shareholder value through the exploitation of existing reserves and pursuit of selective acquisitions. The acquisition of Stratic provides a meaningful 7.27MMboe increase in our 2P reserves in the North Sea. It immediately enhances our production profile, it consolidates EnQuest's working interest in West Don and it adds a working interest in the Crawford development to our asset base.”

Stratic has a 19% interest in licence P.209 covering Block 9/28a which contains the Crawford field (4.93MMBoe net 2P reserves) and 17.25% interest in the West Don oil field…

Unlock the rest of this article with a 14 day trial

Unlock with Email
Unlock with Google

Already have an account?
Login here