Verus Petroleum is pleased to announce the signing of a Sale & Purchase Agreement (SPA) for the acquisition of a 17% non-operated interest in the Alba oil field from Statoil.
This acquisition adds approximately 2,700 boepd to Verus’s daily production. Statoil will retain their liability for the decommissioning cost of the existing Alba facilities and Verus will be liable for the decommissioning costs of any new Alba facilities. The Alba field is located in the Central North Sea.
The transaction will be funded by a combination of debt and existing cash. Verus’s existing lender Nedbank Limited supports the transaction and the existing Reserves Based Lending (RBL) facility will be increased and amended to allow for the participation of several additional banks who are also supportive of the transaction.
Commenting on the deal, Alan Curran, Chief Executive of Verus Petroleum said: “Verus is pleased to have signed this SPA with Statoil. This transaction builds upon our Boa acquisition, which we completed last year and our successful Boa well infill drilling programme. The addition of the Alba asset materially increases our net production to 6,300 boepd and our reserves from 6.5 to 16 MMboe. The transaction is consistent with the Verus strategy of expanding our production base and cash flow. Both Boa and Alba are long-life assets with strong cash generation. Verus will look to reinvest this cash flow in further production and development opportunities.”
The transaction is subject to the satisfaction of existing joint venture partners and regulatory approvals and is expected to complete in the middle of 2018.
Verus is focused on the creation of value through the acquisition of high quality production assets and, over time, through increased exposure to development projects.