The Enquest Plc (LON: ENQ) share price surged 17.3% after successfully negotiating a deal with RockRose UKCS 10 Ltd, a subsidiary of Viaro Energy, regarding a partial divestment in two of its critical assets in the UK North Sea. This deal reflects EnQuest's strategic realignment and capital management efforts within its portfolio.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The agreement involves explicitly the sale of a 15% working interest in the Bressay oil field, known for its substantial reserves and strategic importance in the North Sea oil sector. EnQuest is also divesting the same percentage of interest in the EnQuest Producer floating production, storage, and offloading vessel (FPSO).
The FPSO is a critical component in the region's oil and gas infrastructure, enabling the efficient processing and handling of hydrocarbons extracted from the North Sea's challenging environment.
The deal's financial structure has been carefully crafted to provide value and support EnQuest's broader financial strategy. The total consideration for the interests in the Bressay field and the EnQuest Producer FPSO is at £46.0 million.
RockRose will initially pay £34.75 million directly to EnQuest, which the company plans to utilise for general corporate purposes, enhancing its financial flexibility and capacity to invest in ongoing projects and operations. The balance of £11.25 million is structured to be paid from the future cash flows generated from the Bressay field.
Additionally, RockRose commits to cover its share of capital expenditures related to the Bressay field development as part of the agreement. This commitment aligns with a pre-determined schedule and is subject to the necessary approvals, ensuring that both parties contribute to and benefit from the field's future development and production.
This strategic divestment and partnership with RockRose underscores EnQuest's commitment to optimising its portfolio and strengthening its position in the energy sector.
Steve Bowyer, GM of North Sea for EnQuest, said: “We continue to progress the development of the wider Kraken area, including a Bressay gas tie-back solution to reduce Kraken emissions, as well as an early production solution project at Bressay. We look forward to working with Rockrose, Waldorf (our Kraken JV partner) and the NSTA to move the project forward.”
Enquest share price.
The EnQuest share price surged 17.30% to trade at 16.61p from Thursday’s closing price of 14.16p.
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YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.