Conoco sells UK North Sea oil assets to Chrysaor for $2.7 billion

U.S. energy group ConocoPhillips has agreed to sell its oil and gas assets in the British North Sea to private equity-backed Chrysaor for $2.675 billion, Conoco said on Thursday.

Britain’s ageing North Sea has undergone a major transformation in recent years as long-standing producers have sold assets to smaller players such as Chrysaor that say they can squeeze more money out of fields due to nimbler operations.

The Conoco package produced 72,000 barrels of oil equivalent per day (boed) last year, the U.S. company said.

Chrysaor says on its website its average production between 2018 and 2020 was expected to be 120,000-130,000 boed. After the Conoco deal, Chrysaor will be the biggest producer in the British North Sea.

On Thursday, Chrysaor said the deal, which will be backdated to start in January last year and which is subject to regulatory approval, would bring it up to 177,000 boed pro forma in 2018 and 185,000 boed in 2019. It did not immediately reply to a request to clarify its production numbers.

Chrysaor will also pay unspecified interest in the deal which is not included in the $2.675 billion, Conoco said.

The sale is expected to close in the second half of the year.

Reuters reported on Wednesday that Chrysaor and Conoco were close to sealing the deal, according to sources, who had put the value of the assets at up to $2.8 billion.

BMO Capital Markets and Jefferies are acting for Chrysaor in relation to the Conoco assets, the sources said.

Energy and chemicals firm Ineos, privately owned by British billionaire Jim Ratcliffe, had previously abandoned exclusive talks with the U.S. company over the fields, including a 7.5 percent stake in the Clair project west of the Shetland Islands, whose other owners are BP, Shell and Chevron.

Another bidder was energy-focussed private equity group HitecVision.

Source: Reuters