UK-based EnQuest has exercised its options with BP relating to the Magnus field and associated infrastructure and the Thistle and Deveron fields in the North Sea.
The option was exercised following shareholder approval at the company’s General Meeting on October 1, 2018.
EnQuest said on Thursday that the Magnus acquisition, which is targeted for completion by year-end 2018, subject to requisite regulatory and third party consents, is expected to add approximately $500 million of net present value to the group with a significant increase to both existing 2P reserves and annual production.
Exercising the Thistle option results in EnQuest receiving $20 million in cash in exchange for increasing its total payment obligation of BP’s decommissioning costs of the Thistle and Deveron fields to 7.5% from 4.5% previously.
The cap on EnQuest’s total payment obligation also increases by £42 million to £99 million. The funds are expected to be received from BP within ten business days.
BP agreed to sell portions of its interests in the Magnus oil field and some associated pipeline infrastructure in the UK northern North Sea and in the Sullom Voe Terminal (SVT) on Shetland to EnQuest back in January 2017. This deal was completed in December 2017.
Following the completion of the acquisition of BP’s 25% interest in the Magnus oil field, EnQuest agreed with BP in January 2018 to undertake the management of the physical decommissioning activities for Thistle and Deveron fields in the North Sea.
As part of the original deal from 2017, EnQuest had had an option to acquire the remaining 75% stake in the Magnus field which it exercised last September.