Chrysaor to buy Conoco’s UK oil and gas arm for £2bn
● Deal includes three material North Sea assets ● Chrysaor looks to further extend asset portfolio
Chrysaor Holdings, the private-equity backed oil company, is to acquire Conocophillips’ British oil and gas business in a multi-billionpound deal.
The deal, worth almost $2.7 billion (£2bn), includes assets that produced about 72,000 barrels of oil equivalent (boe) per day last year.
Chrysaor, which is backed by Harbour Energy-managed EIG Partners, claims that the acquisition will make it one of the largest oil and gas producers in the UK North Sea.
The purchase will add three material assets to its portfolio, including Britannia and J-block – two new operated hubs in the UK Central North Sea – along with an interest in the Clair Field area located in the “highly prospective” West of Shetlands region.
As at the effective sale date of 1January2018,conocophillips UK exploration and production assets contain in excess of 280 million boe proved and probable oil and gas reserves.
The transaction is expected to complete in late 2019, subject to regulatory approval. Chrysaor will fund the purchase using existing cash resources and an “upsized” $3bn debt facility.
Including the newly acquired assets, as of 1 January 2019 Chrysaor’s pro forma proved and provable reserves totalled in excess of 600 million boe.
Phil Kirk, Chrysaor chief executive, said: “This significant acquisition reflects our continuing belief that the UK North Sea has material future potential for oil and gas production.
“Acquiring Conocophillips UK accelerates our strategy and further strengthens our position as one of the leading independent exploration and production companies in Europe.”
He added that the business is seeking to extend its portfolio further through the acquisition of additional interests In 2017 Chrysaor snapped up a package of North Sea assets from Shell for up to $3.8bn.
Linda Cook, chairman of Chrysaor, said that the outcome of the deal is “a reinvigorated oil and gas sector, an extension of the producing life of existing fields and the maximisation of hydrocarbon resource recovery”.
Last year, Conocophillips confirmed it will axe about 450 jobs across its UK operations between October 2018 and April 2020.
The business is to retain its London-based commercial trading business and its 40.25 per cent interest in the Teesside oil terminal.
Ryan Lance, Conocophillips chairman and chief executive, said: “We are extremely proud of the legacy we’ve built in the UK over the last 50 years and are pleased that Chrysaor recognises the value of this business. This disposition is part of our ongoing effort to hone our portfolio and focus our investments across future low cost of supply opportunities.”