Verus Petroleum swoops on North Sea acquisition

Move will add 11,000 barrels of oil equivalent per day to profile

Aberdeen-based Verus Petroleum has announced the latest private-equitybacked swoop for a package of North Sea assets.

Verus, supported by HitecVision, has struck a £300 million deal to buy stakes in fields and infrastructure from a Japanese corporation.

Verus’ purchase of Cieco Exploration and Production UK from Itochu will add about 11,000 barrels of oil equivalent per day (boepd) to its production profile. Last year the company produced 1,650 boepd on average.

The sale and purchase agreement includes stakes in the Western Isles asset and Hudson field, both operated by Dana Petroleum.

Verus will also receive interests in the Brent Pipeline System and Sullom Voe oil terminal in Shetland.

The North Sea has been revitalised in the last few years by an influx of investment from companies bolstered by private-equity funds.

Chrysaor, which is backed by Harbour Energy, an investment vehicle of EIG Global Energy Partners, bought interests in 10 fields from Shell for £3 billion last year, while Siccar Point Energy and Neptune Energy have also made eye-catching acquisitions.

Verus’ latest transaction will be funded by a combination of equity from HitecVision, existing cash reserves and debt.

Lender Nedbank also supports the transaction.

No employees will be transferred to Verus from Cieco, which is described as an asset company.

Verus chief executive Alan Curran said the deal fitted in with the firm’s strategy of expanding production and cash flow through the acquisition of “high quality production assets”. holding

Mr Curran also said support from HitecVision, its majority owner, had provided a solid base for growth.

He added: “We are delighted to acquire high value barrels with the Western Isles production in particular having very low lifting costs and being a longlife asset with strong cash generation.”

Verus will move into the Silver Fin building on Aberdeen’s Union Street later this year.

It has an office on Queen’s Gardens. month before, according to the Office for National Statistics.

The data helped the pound rise nearly 0.8% versus the US dollar to 1.324. Versus the euro, sterling was up 0.1% to 1.126.

In Europe, Germany’s DAX closed up 0.88% while France’s CAC ended the day up 1.14%.

A barrel of Brent crude was trading at 78.7 US dollars, a fall of 0.73%.

The biggest risers on the FTSE 100 were Associated British Foods up 60p at 2,285p, Fresnillo up 22p at 847.6p, Rio Tinto up 94.5p at 3,817p and Antofagasta up 21p at 858p.

The biggest fallers on the FTSE 100 were Burberry down 103p at 2,008p and GVC down 27.5p at 971p.

DEAL: The sale and purchase agreement includes stakes in the Western Isles asset and Hudson field, both operated by Dana Petroleum