EnQuest PLC today announces that it has agreed with Swedish oil and gas company, PA Resources AB and certain of its subsidiaries (“PA Resources”) to acquire a 70% participating interest in and operatorship of the offshore Tunisian assets of PA Resources, including 2 MMboe of net producing 2P oil reserves in the Didon oil field and over 40 MMboe of net contingent resources in the Zarat Field.
A further programme of 2 infill wells in the Didon oil field should add additional reserves in the near future. This acquisition is part of the Company’s strategy to create value from maturing assets and new developments. PA Resources will retain a 30% participating interest in the offshore permits and 100% of the onshore permits.
The acquisition will be effective upon satisfaction of certain conditions precedent, and involves upfront cash consideration of US$23m payable upon completion of the transaction. EnQuest has also offered carry consideration of up to US$93m payable following its sanctioning of the Zarat field development. Additional consideration of up to US$133m is payable in relation to the potential developments in the Zarat and Elyssa fields if the capital cost of 2P reserves is to be no greater than $18/boe, with the top end of the range of such additional consideration achievable if such capital costs are to be no more than $13/boe or upon achievement of certain project revenue targets. The maximum amount of consideration above the initial US$23m completion payment will not exceed US$226m.
EnQuest’s CEO Amjad Bseisu said:
“I am pleased to announce our first international production acquisition giving us an operating platform in Tunisia. I am also pleased to have PA Resources as a partner in the Didon oil field and the potential developments at Zarat and Elyssa, with over 100 MMboe of gross contingent resources and additional exploration and appraisal opportunities.
This opportunity is ideal for EnQuest and our new partners, allowing us to deploy our operating and development expertise in these Permits and also adds 2 MMboe of net 2P reserves, 41 MMboe of contingent resources, and approximately 1,000 Boepd net to EnQuest with additional production and 2P reserves coming from a two well in-fill drilling programme in the Didon field in the near future.”
PA Resources’ CEO Philippe R Probst commented: “With a 100 percent interest in Zarat and Didon, PA Resources was never in a position, nor intended to pursue this development without a partner. Partnering with EnQuest is an important step in realizing the value of the company’s assets. The board is now reviewing the company’s strategy and assets and is exploring different possibilities to secure financing of upcoming loan maturities and other commitments.”