Petrofac sells North Sea interest as it retreats from oil production
Petrofac abandoned another attempt at oil production today, agreeing to sell its interest in a North Sea field.
The company is to hand back its 20 per cent share of the venture in Greater Stella Area to the operator, Ithaca Energy, for $292m (£227.79m).
Ithaca, subsidiary of Israel-listed Delek, has cemented its hold in the region and also acquired the licenses and infrastructure interests of private company Dyas.
It expects to increase oil production by 50 per cent after it completes its purchase of Petrofac's interest, and raise output a daily 22,000 barrels.
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Petrofac is a service provider to the oil and gas industry, in recent years has sought to establish interests in production.
However, the firm has since begun to reverse the decision and, in addition to today's North Sea sale, last month sold its assets in Mexico for $200m.
The proceeds from both deals will be used to reduce a debt of $612m.
Chief executive Ayman Asfari said: “This disposal marks a further milestone in our journey back to a capital-light business and, along with recently-agreed transactions in Mexico and Tunisia, marks the significant progress we are making on our stated strategy.”
The company expects a post-tax impairment charge of around $55m.
Ithaca will pay the sum in stages, handing over $145m at the deal's completion – expected in the first quarter of 2019 – and a further $120m of non-contingent deferred consideration between 2020 and 2023. Another $28m of contingent consideration is dependent upon the field's performance.
Petrofac's shares rose 0.5 per cent in early trading on Friday on the back of the news to £6.60.
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