Total Revises UK North Sea Asset Sale

Total has restructured its sale of non-strategic UK North Sea assets, as the buyer, Oman state Petrogas, has withdrawn from the $635mn deal that the French major announced last July. Total acquired them when it bought Maersk Petroleum but did not give a new value for the sale.

"Reflecting recent significant market volatility, Total and Norway-based private equity investor HitecVision have successfully renegotiated the financial terms of the deal to respond to the current environment – while Petrogas is no longer part of the transaction. We have worked closely with HitecVision and its portfolio company NEO Energy to reconfirm our mutual commitment to completing the deal. The agreed revisions respond to current market conditions while retaining the majority of the value of the transaction," Total said May 20.

The structure of the consideration and phasing of payments has been modified, including interest-bearing vendor financing and earnout arrangements, Total said, adding that it looked forward to handing over the operations to NEO Energy.

Wood Mackenzie said last year the assets will produce 25,000 barrels of oil equivalent/day (boe/d) this year, roughly equally split between oil and gas. The assets hold over 30mn boe in remaining reserves. 

Total and NEO Energy have developed detailed transition plans to deliver a smooth handover of operations upon completion, while allowing NEO to focus on embedding planned operating efficiencies and growth plans as rapidly as possible. Subject to regulatory approvals, the parties expect to complete the transaction by Q3 2020.