Interoil to Acquire OTG Energy
InterOil has entered into a letter of intent to acquire OTG Energy from TCK Holding and Oilfield Technology Group AS.
The OTG Energy acquisition is expected to be closed in September. The transaction price for OTG Energy is NOK 100 million to be paid in installments over a 5 year period. - OTG Energy has the option to acquire four producing fields in the UK sector of the North Sea subject to a Letter of Credit (LC) being posted for the decommissioning of the fields.
The value of the LC required is US 4150 million. The four fields produce a total of 4,000 bopd and will have an economic date of January 1, 2007. OTG Energy has 9 highly skilled employees with extensive experience within field operations, project- and risk management, in addition to drilling and well intervention. InterOil has successfully increased production in Peru and Colombia of fields that are classified as 'tail end', i.e. mature fields, through Increased Oil Recovery (IOR) methods and detailed geophysical and geological evaluation to find bypassed oil. We will also work on achieving the same in the North Sea with these field that have a 50% tax on profits, which are good fiscal terms. The team in OTG Energy adds experience in operations offshore, as well their general experience in drilling and production. I believe, that with the addition of this team, InterOil will be better suited to more quickly and safely develop the resources we have in South America, West Africa and the North Sea says Nils N Trulsvik, CEO of InterOil. In addition, says Nils Trulsvik, our production for the year will now be over 10,000 bopd.
OTG Energy was established in 2007 as a subsidiary if Oilfield Technology Group AS (OTG).
We are pleased to join forces with InterOil. InterOil has an exciting and ambitious growth strategy and we are sharing the view of how the market is evolving. We are looking forward to work with Nils Trulsvik and his team to explore the market opportunities, says Tore Nedregaard, CEO of OTG Energy.
The transfer of operatorship is subject to
approval of Department of Trade and Industries in the UK and a final Share Purchase Agreement with existing owners of the fields.
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