North Energy completed the acquisition of Explora Petroleum for a cash payment of US$2.5 million this week.
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Image from North Energy. |
The transaction was implemented through the purchase of all the shares in Explora from the company's shareholders, who comprise certain employees and individual shareholders, and a group of institutional investors. North Energy is financing the acquisition through existing credit facilities and cash in hand. Through the acquisition of Explora, North Energy is taking over the company's net cash position, exploration tax refund, uncovered tax-related loss and future commitments related to organization and the license portfolio.
Explora had 18 employees and 16 licenses on the Norwegian continental shelf (NCS), including small interests in the Skarfjell and Grosbeak discoveries, both in PL 378 in the northeastern North Sea, located about 20km southwest of the Gjøa field. Skarfjell is currently estimated to contain 139 MMboe (NPD, RNB 2015) while Grosbeak is currently estimated to contain 35 MMbbl of recoverable oil equivalents (NPD, RNB 2015). Net to Explora the resources in license PL 378 are estimated to be approximately 4 MMboe.
In connection with the acquisition of Explora, North Energy will concentrate its petroleum operations in a single company. This is to be done by transferring today's petroleum operations from North Energy to Explora, and thereby bringing employees together in a new organization for the combined company.
Acquiring Explora will strengthen North Energy's financial position and increase its net cash position and tax balances.
"We want to contribute actively to what we believe to be a necessary consolidation on the NCS," Knut Sæberg, North Energy CEO said. "The sharp fall in the price of oil has necessitated a much greater focus on cost optimization and larger, more robust entities. We are therefore well positioned to play an active role in this consolidation."
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