Total Divests Non-Core UK Assets for $635MM



Total Divests Non-Core UK Assets for $635MM
Total agrees to divest several non-core UK assets to Petrogas Neo UK Ltd for $635 million.

Total revealed Wednesday that it has signed an agreement to divest several “non-core” UK assets to Petrogas Neo UK Ltd for $635 million.

Formerly owned by Maersk Oil, the assets are located in the eastern North Sea and comprise the following:

Area

Field

Interest Sold

Operator

UK

Dumbarton

100 percent

TOTAL

Balloch

100 percent

Lochranza

100 percent

Drumtochty

100 percent

Flyndre

65.94 percent

Affleck

66.67 percent

Cawdor

60.6 percent

GoldenEagle

31.56 percent

CNOOC

Scott

5.16 percent

Telford

2.36 percent

The transaction remains subject to approval from the relevant authorities and is expected to close in December 2019.

“This transaction is consistent with our portfolio management strategy, aiming at lowering our break-even point by optimizing capital allocation and divesting high technical costs assets,” Arnaud Breuillac, Total president of exploration and production, said in a company statement.

“Our primary objective is to maintain the organic break-even before dividend below $30 per barrel and high-grading our portfolio will help us achieve this,” he added.

Commenting on the deal, Wood Mackenzie said it was the latest example of majors divesting non-core UK assets to private equity-backed companies and independents expanding their presence in the UK upstream sector.

Even with this sale, Total remains one of the UK’s top producers in 2019, according to Wood Mackenzie, which highlighted that production in the region was “underpinned” by Elgin-Franklin, Laggan-Tormore and Culzean. The company started up production from the North Sea Culzean gas condensate field back in June.

Total acquired Maersk Oil in 2018. Petrogas NEO UK is jointly owned by Petrogas E&P UK Ltd, a subsidiary of Oman based Petrogas (a part of conglomerate MB Holding group) and NEO E&P, an investment platform of HitecVision.



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