Tullow to sell stake in Schooner and Ketch assets to Faroe Petroleum

30th Apr 2014 08:16

Tullow Oil on Wednesday announced an agreement to sell stakes in two North sea oil fields.Tullow has agreed to farm down 53.1% of its Schooner unit interest and 60% of its Ketch asset in the UK southern North Sea gas basin to Faroe Petroleum.The sales are being made for a total consideration of $75.6m in addition to royalty payments on future Schooner developments. A $58.8m slice of the payment will be made on completion of the sale, with the balance paid as certain milestones are achieved. The deal is expected to be completed by the end of the year. Tullow's Chief Executive, Aidan Heavey, said: "Schooner and Ketch have been critical to Tullow's success and growth since they were acquired in 2005. During a transformational period of growth for Tullow, they provided important, stable, cash flows which have helped to fund the group's successful frontier exploration campaigns. "However, we have a clear strategy of constant and active portfolio management and have focused our business on conventional light oil. Sales and farm-down processes continue across Tullow and, although transactions are taking longer than initially expected, we are making good progress in tough but improving market conditions." Earlier this year, February production rates at Schooner's SA11 well were affected, although following treatment in March stable production from the well has now resumed. The news came as Tullow confirmed that its full-year guidance remained at between 79,000 and 85,000 barrels of oil equivalent per day (boepd) following a good performance since the start of the year. Its share price rose 1.44% to 878p in opening trade, while Faroe shares climbed 1.23% to 144.25p.NR