Cairn Energy Expands Portfolio with New North Sea Assets
UK independent Cairn Energy has agreed to buy private Norwegian oil firm Agora Oil & Gas as part of a strategy to balance its portfolio of assets. Cairn announced Tuesday that it will pay $450 million for Agora, which holds several assets in the UK and Norwegian North Sea.
Agora has a 15-percent interest in the Catcher P1430 license in the Central North Sea and a 20-percent interest in the Tybalt P1632 license in the Northern North Sea. It also holds interests in nine other licenses, including two recently-awarded licenses in the APA 2011 licensing round in the Norwegian North Sea (with Statoil as operator).
Agora also intends to participate in the forthcoming UK 27th Licensing Round.
"This is an important first step in establishing balance in the Cairn portfolio. This acquisition secures a building block in areas where we see the opportunity to build cash flow from near term, lower risk exploration, development or producing properties," said Cairn Chief Executive Simon Thomson in a statement.
"Agora possesses attractive core assets and significant exploration potential both in 2012 and beyond in an area offering future organic growth. Like the Cairn team, the Agora team have a proven track record of adding and realizing value for shareholders."
Cairn sees the assets as complementary to its frontier exploration assets in Greenland and the Mediterranean. Last year, Cairn drilled five wells in Greenland but found no commercial hydrocarbons there.
Commenting on the deal Will Arnstein, an oil analyst at London-based broker FinnCap, noted the acquisition adds mean prospective resources of 213 million barrels of oil equivalent but pointed out that the acquisition price of $20.50 per barrel of oil equivalent "seems quite expensive".
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