THE acquisitive oil and gas firm led by former Centrica boss Sam Laidlaw, Neptune Energy, has highlighted its commitment to the UK North Sea after agreeing to buy assets in the area from US giant Apache.
The company is buying into one field which is ready for development and a prospect it described as one of the largest undrilled exploration opportunities in the Central North Sea, off Scotland.
The deal underlines the confidence in the potential of the UK North Sea and the outlook for the oil and gas market felt by the team led by Mr Laidlaw and the international financiers that back Neptune.
Read more: Ambitious oil firm boss eyes growth in North Sea
The price was not disclosed.
However, Neptune’s chief executive Jim House said the deal underlined the management team’s determination to grow the firm into a leading international exploration and production company.
The company said: “The transaction … demonstrates Neptune’s commitment to the UK Central North Sea.”
The deal will boost hopes the North Sea oil and gas industry may be able to bounce back from the downturn triggered by the crude price plunge, helped by a changing of the guard in the area.
Read more: $3.8bn deal puts North Sea in focus
A number of new players have won backing from private equity firms to buy North Sea assets from companies that may want to shift investment elsewhere.
The buyers appear confident the rally in the oil price since late 2016, to around $72 per barrel, will be maintained. Major exporters have cut production to support the market.
Chrysaor bought a giant portfolio accounting for half of Royal Dutch Shell’s North Sea production for $3.8bn last year.
Neptune established itself as a significant player in the North Sea through the €4.7 billion acquisition of French utility Engie’s exploration and production arm, which completed in February.
In June Neptune agreed to buy acreage in the Norwegian North Sea from German utility VNG.
There has been talk since the oil price plunged in 2014 that Apache might sell off its North Sea assets to focus investment on its US shale interests.
Read more: Oil giant considers North Sea exit
Apache has been active in the North Sea since 2003 when it bought the Forties field from BP for $1.3bn. The company acquired a big North Sea portfolio, including the Beryl field, from ExxonMobil for $1.75bn in 2011.
It made no comment on the Neptune announcement yesterday.
Apache has shown that it still sees potential in the North Sea assets in recent months.
The company made the Garten discovery around four miles from the Beryl platform in March. Chief executive John J. Christmann IV, noted then that Garten was the fourth commercial discovery made in the Beryl area in the preceding three years.
Mr Laidlaw clearly believes the downturn that followed the fall in the crude price from $115 per barrel in June 2014 to less than $30 early in June 2016 has created opportunities in the oil and gas market.
He founded Neptune in 2015, a year after leaving Centrica, and won backing for an ambitious growth strategy from private equity heavyweights Carlyle Group and CVC and from the China Investment Corporation.
Before his eight years running Centrica Mr Laidlaw was chief executive of North Sea-focused Enterprise Oil and led exploration and production operations for Chevron and Amerada Hess.
Subject to regulatory approvals Neptune will acquire Apache’s 35% working interest in the Seagull development and a 50% working interest in the Isabella prospect.
Neptune said Seagull was a low cost, near-term development close to existing infrastructure. First output is expected prior to Q1 2022.
It noted: “The Isabella prospect is considered one of the largest undrilled exploration opportunities in the Central North Sea, with planned drilling operations also commencing during 2019.”
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