Magnus is the UK’s most northerly oilfield, 160km northeast of the Shetland Isles (pictured).
It bought a 25-per-cent stake in the BP field in 2017 and also secured the option to boost its holding as Enquest shareholders recently supported a £107-million rights issue to fund the purchase of the remaining 75 per cent of Magnus.
The acquisition of Magnus is expected to add US$0.5 billion of net present revenue to Enquest.
The firm said it had now exercised its option on the field, which would help boost production and reserves. The deal also means Enquest takes on greater decommissioning duties at the North Sea’s Thistle and Deveron fields, which are only around 3km apart and also to the northeast of the Shetlands.
Exercising the option over Thistle and Deveron is due to lead to a US$20-million cash payment from BP in exchange for Enquest increasing its payment obligation of BP’s decommissioning costs to 7.5 per cent from 4.5 per cent. Enquest’s obligation payment cap is anticipated to increase to £99 million from £42 million because of the deal.
The firm’s chief executive Amjad Bseisu said: “Our view of Magnus as a high-quality asset has been enhanced since acquiring our initial 25-per-cent interest.
“The option is on attractive economic terms and upon completion, our increased ownership will provide the group with an immediate and material increase to the group’s existing 2P [proven plus probable] reserves and annual production.”
Enquest operates assets including Heather/Broom, Dons, Magnus, Greater Kittiwake, Scolty/Crathes Alma/Galia and Kraken.
Marathon Oil has become the latest US company to mull scaling back in the North Sea at its two fields west of Shetland and at Brae northeast of Aberdeen.
Marathon’s portfolio is estimated to have around 31 million barrels in resources. It is understood the fields could be available for up to US$200 million.
Chevron, Conocophillips and Eog Resources are among other groups to scale back North Sea operations recently.
Marathon said it was looking to simplify its structure and concentrate on US-based assets.
Muness Castle, Unst, north Shetland. Picture credit: Wikimedia