LONDON-based Serica Energy is increasing its exposure to the North Sea by acquiring a stake in the Erskine field east of Aberdeen from BP in a cash and shares deal worth around £10m.
The deal will give Serica its first production in the UK, where the company says it wants to build a stronger presence.
The acquisition is the latest in a series involving oil and gas firms and investors based in London buying assets in the North Sea.
Some believe the gradual retreat of majors like BP from mature areas of the territory is creating opportunities to acquire assets at good prices.
BP has been selling off non-core North Sea assets to focus investment on big new fields west of Shetland.
It is investing in these alongside Royal Dutch Shell, which has put some North Sea assets up for sale.
Shell yesterday announced plans to sell the bulk of its stake in Australia's Woodside Petroleum for around $5bn (£2.9bn) after tax.
This forms part of new chief executive Ben van Beurden's plans to sell $15bn of assets.
Tony Craven Walker, chairman of Serica Energy, said: "The agreement to buy an interest in the producing Erskine field from BP is an important step for Serica."
The deal will give Serica its first production from the North Sea and provide what Mr Walker described as a valuable income stream for Serica. He noted the tax advantages the deal would generate for Serica, which has North Sea acreage containing the undeveloped Columbus discovery and exploration prospects.
The company will be able to set the losses it has incurred on its North Sea activity against the revenues generated from its stake in Erskine.
Mr Walker said the deal could boost the value of its existing North Sea position by increasing the chances the Columbus find could be brought onstream.
Erskine produces via the Lomond facilities which lie close to Columbus.
"Securing an interest in Erskine provides us with a valuable foothold in a nearby producing field together with access to associated infrastructure and will assist us in our ongoing efforts to bring Columbus on to production," said Mr Walker.
Last week Mark Routh, who runs London-based Independent Oil & Gas, said the company would pursue such a North Sea hub strategy and highlighted its appetite for deals.
In May, London-based Trap Oil linked up with America's Prostar investment business to hunt for North Sea assets. Prostar has raised around £60m to invest in deals.
Aim-listed Serica will pay BP $11.1m (£6.5m) cash and 27 million shares, subject to final adjustment.
BP has agreed to hold the shares for not less than one year. They will represent 9.7% of the enlarged company.
Shares in Serica Energy closed up 0.25p at 11.12p.
Serica said net production for the year 2014 accruing to the interest in Erskine acquired is estimated to be 1,234 barrels oil equivalent per day.
The asset generated $10.2m post tax profit in 2013.
Shell will reduce its stake in Woodside to 4.5% from 23.1%.
Woodside will buy back half the shares Shell is selling. The rest will be sold to institutions.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article