Sterling sells its UK subsidiary

Chrysaor buys Spirit Energy’s stake in UK's Armada Area fields

Mar 22, 2018
2 min read
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UK independent company Chrysaor has entered into an agreement with Spirit Energy to acquire its entire interests in the Armada, Maria and Seymour fields in the Central North Sea.

As a result of the acquisition Chrysaor will own 100 per cent of the Armada Area. The deal is expected to complete in the second half of 2018.

Phil Kirk, Chief Executive of Chrysaor, said: “This acquisition is part of Chrysaor’s strategy to prolong asset life, maximise recovery and deliver value from its UK North Sea portfolio. Chrysaor can now progress its plans to realise the full potential of the fields and will shortly commence well site surveys and secure long lead items and drilling equipment.”

As part of the transaction, Spirit Energy will retain associated liability for decommissioning subject to a cap.

Wood Mackenzie's Fiona Legate, senior research analyst, North Sea Upstream said: "This deal is a bolt-on to Chrysaor’s existing portfolio. We expect the company will still look to grow its portfolio both organically and inorganically. This private equity player has a declining asset base, with production dropping below 100 kboe/d by 2020. Our view is that larger acquisitions will be needed if the company is to monetise this portfolio in the near term."

Legate added: "We assume the project will include further drilling, which is likely to be accelerated now Chrysaor is the sole owner of the assets. The fields produced 8.3 kboe/d in 2017 and the previous partners had planned to cease production this year."