REG - EnQuest PLC - Acquisition of Harbour Energy’s Vietnam Business

EnquestAnnouncement

22/01/2025 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250122:nRSV1934Ua&default-theme=true

RNS Number : 1934U  EnQuest PLC  22 January 2025

 

 

EnQuest PLC, 22 January 2025

 

Acquisition of Harbour Energy's Vietnam Business

 

 

EnQuest PLC ("EnQuest" or "the Group") is pleased to announce that it has
signed a Sale and Purchase Agreement to acquire Harbour Energy's business in
Vietnam, which includes the 53.125% equity interest in the Chim Sáo and Dua
production fields. This transaction aligns with the Group's strategic aim to
grow its international operating footprint by investing in fast-payback
assets, with low capex and reduced carbon intensity.

The transaction has an effective date of 1 January 2024 and is scheduled to
complete during the second quarter of 2025. The headline value of the
transaction is $84 million and, net of interim period cash flows, the
consideration to be paid by EnQuest on completion is expected to equal c. $35
million. This fully staffed new country entry expands the Group's South East
Asian footprint beyond Malaysia, where EnQuest recently celebrated ten years
of successful operations and was named Operator Of The Year by Petronas in
2024.

EnQuest will operate the Chim Sáo and Dua fields ('Block 12W') from
completion, deploying its proven late life and FPSO asset management expertise
to maximise value and progress discovered resources into reserves. As at 1
January 2025, net 2P reserves and 2C resources across the fields total 7.5
million boe and 4.9 million boe, respectively. Block 12W production has
responded positively to the drilling of three infill wells during 2023 and a
series of well interventions undertaken in 2023-2024, with the combined impact
of these scopes contributing c. 3.0 MMboe to 2P reserves at 1 January 2025.

Net production in 2025 is forecast to average c. 5.3 kboepd, with further
significant upside potential relating to well intervention performance. Oil
(c. 73% of output) is high quality and has historically realised a c. 10%
premium to Brent. Gas is commercialised via an Associated Gas Gathering
Agreement. Field volumes are produced at a life of field asset breakeven of c.
$40 per boe, with minimal capital requirements and a decommissioning liability
that is covered via a PSC fund. The resulting free cash flow underpins Chim
Sáo and Dua's value, making them strong anchor assets for EnQuest's entry
into Vietnam.

The Block 12W Production Sharing Contract runs to November 2030, with an
opportunity to extend the contract. Additional Block 12W prospectivity is
spread across three gas discoveries and several additional targets; potential
upside that EnQuest intends to investigate.

Commenting on the acquisition, EnQuest Chief Executive Officer, Amjad Bseisu
said:

"Our entry into Vietnam is highly complementary to EnQuest's well-established
and high-performing Malaysia business and significantly enhances the scale of
our operations and opportunity in South East Asia. The region is key to
EnQuest's growth and diversification strategy and we are excited by the
potential to deploy our proven expertise and operating capability to optimise
and enhance the Block 12W assets. We look forward to welcoming our new
employees from the existing Harbour Energy team to the Group and are committed
to working with our partners, Bitexco and PetroVietnam Exploration Production
Corporation Ltd, to explore future opportunities in the assets. As EnQuest
continues to work towards a transformational transaction in the UK North Sea,
this agreement underlines our commitment to growth, a disciplined approach to
M&A, and deploying capital where we see the most favourable returns."

 

Ends

 

 

For further information please contact:

 

 EnQuest PLC                                                      Tel: +44 (0)20 7925 4900
 Amjad Bseisu (Chief Executive Officer)
 Jonathan Copus (Chief Financial Officer)
 Craig Baxter (Head of Investor Relations and Corporate Affairs)

 Teneo                                                            Tel: +44 (0)20 7353 4200
 Martin Robinson
 Harry Cameron

 

 

 

NOTES TO EDITORS

 

 

BLOCK 12W BACKGROUND

 

Block 12W is made up of three producing oil and gas fields; Chim Sáo, Chim
Sáo North West (CSNW') and Dua, located in the Nam Con Son Basin,
approximately 400 km south west of Vung Tau, Vietnam.

The Chim Sáo oil field was discovered in 2006 and first oil was achieved in
October 2011. Having been developed via a single wellhead platform, Chim Sáo
and CSNW oil production is exported via  the Lewek Emas floating production
storage and offloading ('FPSO') vessel, and gas is exported by pipeline to
Vung Tau near Ho Chi Minh City. Chim Sáo currently has 14 active oil
producers and seven water injectors. CSNW is developed via a single injector
and producer pair.

The Dua oil and gas field was subsequently developed as a subsea tie-back to
Chim Sáo, with first production achieved in July 2014. Dua production is via
three subsea oil producers.

This transaction involves EnQuest's acquisition of the 28.125% equity share
held by Premier Oil Vietnam Offshore BV (POVO) and the 25% share held by
Premier Oil Vietnam Limited (POVL). EnQuest will be the field operator, with
non-operator joint venture partners Bitexco (working interest of 31.875%) and
PetroVietnam Exploration Production Corporation Ltd (working interest of 15%).

VIETNAM

 

Vietnam has significant potential for oil and gas development beyond its
established 4.4 billion boe reserves, with an increase in deepwater
exploration in the hydrocarbon-rich South China Sea driving projects which
seek to replace the production from mature offshore fields. In addition, there
is significant opportunity for late life asset managers, such as EnQuest, to
acquire producing assets as established operators have PSCs nearing their end
dates.

 

Vietnam is investing in infrastructure to support oil and gas production,
including offshore drilling rigs, pipelines, refineries, and storage
facilities. The development of these facilities is vital for enhancing
production capacity and ensuring the country's energy security.

 

Vietnam has also invested in expanding its refining capacity and petrochemical
industry. The Dung Quat Refinery and the Nghi Son Refinery are examples of
this effort to process domestically produced crude oil and to reduce reliance
on imports.

 

ENQUEST

 

EnQuest is providing creative solutions through the energy transition. As an
independent energy company with operations in the UK North Sea and South East
Asia, the Group's strategic vision is to be the partner of choice for the
responsible management of existing energy assets, applying its core
capabilities to create value through the transition.

EnQuest PLC trades on the London Stock Exchange.

Please visit our website www.enquest.com (http://www.enquest.com) for more
information on our global operations

 

Forward-looking statements: This announcement may contain certain
forward-looking statements with respect to EnQuest's expectations and plans,
strategy, management's objectives, future performance, production, reserves,
costs, revenues and other trend information. These statements and forecasts
involve risk and uncertainty because they relate to events and depend upon
circumstances that may occur in the future. There are a number of factors
which could cause actual results or developments to differ materially from
those expressed or implied by these forward-looking statements and forecasts.
The statements have been made with reference to forecast price changes,
economic conditions and the current regulatory environment. Nothing in this
announcement should be construed as a profit forecast. Past share performance
cannot be relied upon as a guide to future performance.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQEAEFFALESEAA