Paladin Acquires North Sea Assets from BP and Amerada Hess
Paladin Resources has made a major acquisition of producing assets in the UK sector of the North Sea from BP and Amerada Hess. The acquisition is valued at US $153 million. The company is acquiring producing interests in the Arbroath, Montrose and Arkwright Fields and surrounding acreage, including the Carnoustie and Wood discoveries. Subject to regulatory approval, the company will assume operatorship on Jaunary 1, 2003.
Paladin will is proposing a share placement of 63,563,798 new ordinary shares at an issue price of 66 pence per share, subject to clawback under the Open Offer, to raise approximately £42 million, fully underwritten by Cazenove & Co. Ltd and Investec Bank (UK) Limited.
This acquisition will significantly add to Paladin's reserves. Proven and probable reserves to be acquired at the effective date are estimated at 39.5 MMboe by DeGolyer and MacNaughton. The Company's internal estimate of its existing proven and probable reserves (pre-acquisition) at the same date is approximately 105 MMboe. Current production from the North Sea Assets to be acquired is approximately 14,000 boepd. Current production from the Group's existing assets is approximately 38,000 boepd.
The Directors of Paladin consider that the North Sea Assets offer a number of attractive investment opportunities, including reservoir rejuvenation and the capture of additional reserves through infill drilling, as well as the potential to develop the Wood and Carnoustie discoveries. The acquisition will result in a significant expansion to Paladin's broad portfolio of producing assets located in the UK, Norwegian and Danish sectors of the North Sea, and Indonesia.
Roy Franklin, Chief Executive of Paladin, commented: 'This acquisition caps our most successful year to date, both operationally and financially. It boosts production and gives us a stronger UK North Sea position with the potential for material upside.
'Following the fundraising and this significant addition to our production, we will be well positioned to deliver further consistent and sustainable growth for our shareholders.'