Asset A&D

Waldorf Production Acquires Further Non-Op North Sea Interests

By Mahati K L
March 10, 2021
2 minutes read
Kraken FPSO, UK North Sea

North Sea operator Waldorf Production Ltd. entered into two separate agreements with Cairn Energy Plc and Ithaca Energy Ltd. to acquire various non-operated interests in the UK North Sea.

Under the terms of deal with Cairn, Waldorf will have an option to acquire Cairn’s 20% and 29.5% non-operated interests in the Catcher and Kraken fields, respectively, for a total consideration of US$460 million, plus certain additional contingent payments of up to US$125 million (based on future oil prices and production performance).

The Catcher (Block 28/9a in license P1430) and Kraken (Block 9/2b within license P1077) fields are located in the UK North Sea in water depths of 90 and 119 m. The Catcher field is one of the largest developments in the UK North Sea, which was discovered in 2010 and commenced production in 2017. The Kraken field was discovered in 1985 and delivered its first oil in 2017, and its field development plan was completed around the end of Q1-2019. Combined proven plus probable (2P) reserves (as of December 31st, 2020) attributable to the acquired interests are approximately 33 million barrels of oil equivalent (MMboe), with current production averaging approximately 17,500 barrels of oil equivalent per day (boe/d).

Pursuant to the deal with Ithaca, Waldorf will acquire a 20% interest in Block 22/1b and a 15% interest in Block 22/1a for an undisclosed consideration.

Block 22/1b is located within license P2373 and contains the Fotla prospect. Ithaca has completed the technical and engineering studies required for drilling of an exploration well in the license, which is expected to be drilled in Q2-2021. If the Fotla well encounters oil, it would be tied back to the nearby Alba field, which is also operated by Ithaca.

“Waldorf sees the North Sea as uniquely suited for disciplined small-cap E&P companies such as ourselves with well-managed, long-life assets available at attractive valuations. We continue to look for further growth opportunities in the near-term,” said Erik Brodahl, CEO of Waldorf Production.

“The divestment of our UK producing assets as they move into decline phase will further strengthen our ability to pursue Cairn’s strategic goals and position the company robustly for the decade ahead,” commented Cairn’s CEO, Simon Thomson.

Privately-held Waldorf Production is engaged in oil & gas operations in the UK North Sea, and holds non-operated interests in the Alba, Bacchus, Bittern, Columbus, Rochelle, and Enoch fields, which it acquired in late 2019 through its acquisition of Endeavour Energy UK Ltd.

The transactions, which are subject to customary closing conditions, including contract and board approval, are expected to close in late Q2-2021.

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