Petrofac Ltd on Friday said it agreed to sell its subsidiary Petrofac GSA Holdings Ltd for up to USD292 million to oil & gas operator Ithaca Energy UK Ltd.
The oilfield services provider said GSA owns 20% interest in the Greater Stella area development and its 25% interest in the FPF1 floating production facility, both offshore North Sea. In addition to that, GSA has long-term receivables from joint operation partners.
Under the disposal agreement, Ithaca will pay USD145 million by or on completion and a further USD120 million in the period between 2020 and 2023.
The remaining USD28 million will be paid depending on GSA performance. Petrofac estimates that the transaction will result in an impairment charge of USD55 million after tax.
The company said it will use proceeds to reduce gross debt.
Petrofac expects to complete the transaction in the first quarter of 2019, after Ithaca finalises the acquisition of investment firm Dyas UK Ltd's 25% stake in the Greater Stella area development and its shares in the FPF1 facility.
Upon completion, Petrofac will continue to provide duty holder services to the FPF1 facility on a life of field contract.
"This disposal marks a further milestone in our journey back to a capital-light business and, along with recently-agreed transactions in Mexico and Tunisia, marks the significant progress we are making on our stated strategy," said Petrofac Chief Executive Ayman Asfari.
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