Total E&P UK, the UK exploration and production arm of the French energy giant, has splashed £10 million on a further 10% interest in the Glenlivet oil field West of Shetland.
Seller Faroe Petroleum said the terms of the sale, backdated to the start of this deal, were conditional on the acceptance of a field development plan and achievement of a set of production targets.
The purchase takes Total’s interest in the prospect, which it operates, to 70%.
Glenlivet is expected to be developed in conjunction with the nearby Edradour gas discovery as part of the West of Shetland Laggan and Tormore project sanctioned in 2010 and already operated by Total.
Faroe chief executive Graham Stewart said the sale was in line with Faroe’s strategy of monetising its exploration successes.
“Total’s West of Shetland gas development project to export gas from Laggan, Tormore, Edradour and Glenlivet is a highly capital-intensive investment in infrastructure, and one of the most significant UK upstream investments in recent years,” he said of the site, which is expected to produce around 90,000 barrels of oil equivalent per day when at peak production.
“Faroe’s timely transaction will release significant capital for investment in Faroe’s high-impact exploration and appraisal portfolio.”
* North Sea explorer and producer Trap Oil has acknowledged a “challenging” six months as it continues efforts to cut costs and maximise returns from existing fields.
Chief executive Mark Groves Gidney said directors had spent a considerable amount of time deciding “how best to optimise the future of the business”.
“We considered a number of options at length, but ultimately recognised that the best way forward was to reduce operating costs to a minimum in order to maintain the company’s existing assets alongside seeking to maximise returns from those assets,” he said in the firm’s interim results statement for the year to June.
Revenues fell 50% to £8.59m, while an impairment charge of £4.70m on the firm’s 15% interest in the Athena field pushed pre-tax losses to £8.43m.
It said it was adopting its normal “prudent approach” in forecasting production uncertainties following a well failure and the time likely to be required to bring the asset fully back on-line.
The field operated by Ithaca was also hit by bad weather during the first half, Trap Oil said, causing it to be shut down temporarily with the loss of some revenue.
The company has increased its stake in the Romeo prospect and expects to drill at the Kratos field in the first half of next year.
Mr Groves Gidney and chief operating officer Paul Collins will step down from the firm’s board, and work on a consultancy basis as part of the effort to cut costs.
Chairman Simon Bragg has already left the firm, with non-exec Marcus Stanton heading the board during the transition.
Management pay and headcount have already been reduced as part of a drive to save around £1m a year.