Britain’s biggest oil and gas producer Harbour Energy has bought the North Sea assets of rival Waldorf after the group fell into administration.
London-listed Harbour said it has acquired all the subsidiaries of Waldorf Energy Partners and Waldorf Production in the UK North Sea fields for $170million (£127million), in a deal that will bolster the group’s oil output and provide attractive ‘financial synergies’.
Managing director of Harbour’s business unit Scott Barr told shareholders the move would boost ‘the long-term sustainability of our UK business, the jobs it continues to support and the energy security it provides’.
It follows hundreds of North Sea job losses over the last two years as producers have shouldered lower commodity prices and a so-called ‘windfall tax’ in the UK that has eroded profitability.
Waldorf moved into administration in June last year as its cash dried up and it was unable to pay creditors.
The High Court rejected Waldorf’s restructuring plan in the summer amid a $30million debt owed to Capricorn Energy over its purchase of stakes in the Catcher and Kraken North Sea sites.
In a separate statement on Friday, Capricorn said it had signed a lock-up agreement backing the deal and will settle its unsecured claims against Waldorf for around $4million to $5million.
Harbour said the takeover is ‘immediately materially accretive’ to group free cash flow and it will ‘support the competitiveness, resilience and longevity’ of its UK business.
Set to complete in the second quarter of next year, it will increase Harbour’s interest in the Catcher field to from 50 to 90 per cent, and provide a new production base in the Northern North Sea.
Barr said: ‘This transaction is an important step for Harbour in the UK North Sea, building on the action we’ve already taken to sustain our position in the basin given the ongoing fiscal and regulatory challenges.
‘It stabilises the Catcher joint venture partnership and delivers immediate cash flow benefits. It also improves the long-term sustainability of our UK business, the jobs it continues to support and the energy security it provides.
‘In addition, it facilitates a welcome solution to funding and decommissioning challenges for multiple parties in the UK North Sea.’
Harbour Energy shares were up 4.1 per cent in early trading to 207.4p.
“Join the companies that smart energy professionals follow – because when you’re featured on OGV, the industry pays attention.”
