Chrysaor buys Spirit Energy’s Armada area fields (UK)

March 22, 2018

Chrysaor, the UK oil & gas independent, will acquire Spirit Energy’s entire interests in the Armada, Maria, and Seymour fields offshore the UK.

Chrysaor is buying Spirit Energy’s 23,58 percent stake in the Armada Area consisting of Drake Fleming & Hawkins fields.

It is also buying Spirit Energy’s stakes in Maria (64%) and Seymour (43%) fields. As a result of the acquisition Chrysaor will own 100% of the Armada Area.

To remind, Spirit Energy was created in 2017 following the combination of Centrica’s Exploration & Production business and Bayerngas Norge AS.

Armada Hub installation, which consists of Drake, Hawkins and Fleming gas/condensate fields, with SW & NW Seymour, and Maria fields in the UK Sector, Rev (third party fields operated by Repsol Norge) and Gaupe fields in the Norwegian Sector, tied back to Armada.

Drilling ahead

The deal is expected to complete in the second half of 2018. Spirit Energy will retain associated liability for decommissioning subject to a cap.

Chrysaor did not reveal the financial details of the transaction.

Phil Kirk, Chief Executive of Chrysaor, said: “This acquisition is part of Chrysaor’s strategy to prolong asset life, maximise recovery and deliver value from its UK North Sea portfolio. Chrysaor can now progress its plans to realize the full potential of the fields and will shortly commence well site surveys and secure long lead items and drilling equipment.”

M&A in UK oil and gas sector

Mergers & acquisitions activity in the UK oil and gas sector is expected to continue in 2018, however it is not expected to match the levels reached in 2018, according to a report released earlier this week.

In its 2018 Business Outlook released on Tuesday, Oil & Gas UK said the value of UK upstream M&A deals announced in 2018 surpassed $8 billion (total UK traded value only) as counterparts reached innovative commercial deals to overcome potential barriers such as decommissioning liabilities.

Both Chrysaor and Spirit Energy contributed to the total amount, as Centrica’s E&P business and BayernGas Norge merged into Spirit Energy back in December 2017, and Chrysaor completed the acquisition of a batch of Shell’s UK North Sea assets for a fee of up to $3.8bn,

Looking forward, Oil & Gas UK expects M&A to continue during this year, albeit on a lesser scale than in 2017, as many new owners are working on maximizing value from their newly acquired portfolios.

Shell’s acquisition of BG Group in 2016, for a reported sum of $53 billion, remains UK’s largest oil and gas deal, hardly expected to be matched any time soon.

Offshore Energy Today Staff