Australian firm acquires UK oil exploration specialist

NORTH Sea-focused Encounter Oil is set to be acquired by Australia’s Talon Petroleum in a deal that reflects growing interest in the exploration potential of the acreage off Scotland.

The deal will give Talon control of a business that has interests in two prospects that are thought to contain around 130 million barrels of oil in total.

Encounter is run by Graham Doré and Paul Young, who helped develop the Encore Oil business bought by Premier Oil for £221 million in 2011.

Talon said the all-share deal was a big step forward in its strategic push to develop a compelling portfolio of North Sea opportunities, which it launched six months ago.

It expects Mr Doré and Mr Young to play a pivotal role in the firm delivering long-term shareholder value from the North Sea portfolio.

North Sea drilling fell to record lows in the wake of the crude price plunge from 2014. The partial recovery in the crude price since late 2016 combined with the success of firms that continued exploring has encouraged others to look again.

On Wednesday international giants Total, CNOOC and Edison announced they had made a find east of Aberdeen estimated to contain 250 million barrels oil equivalent.

Talon said it has raised AUS $1.25m (£0.7m) from sophisticated investors to help develop its North Sea assets.

Hertfordshire-registered Encounter controls the licences containing the 107m barrel Skymoos prospect in the Moray Firth and the 27m Rocket prospect, close to the giant Catcher field east of Aberdeen.

Talon bought a 10% stake in the Curlew-A discovery from Corallian Energy in October.

It will pay an initial 100 million shares in the firm to the owners of Encounter with further payments to be made depending on the progress achieved on the licences.The latest price for Talon shares was 0.3 cents.

Source: The Herald