Waldorf Buys MOL UK, Doubles Stake In Catcher Field

Waldorf Buys MOL UK, Doubles Stake In Catcher Field
Waldorf Production has entered into a binding Sale and Purchase Agreement for the acquisition of the entire UK business of Hungarian oil firm MOL.

Independent exploration and production company Waldorf Production has entered into a binding Sale and Purchase Agreement for the acquisition of the entire UK business of Hungarian oil firm MOL.

Waldorf Production said that it would acquire certain MOL’s UK subsidiaries comprising their entire UKCS business.

The key UKCS assets being acquired include non-operated interests of 20 percent in the Greater Catcher Area, 50 percent in the Scolty and Crathes fields as well as 21.83 percent in the Scott and 1.59 percent in the Telford licenses.

The transaction has an economic effective date of January 1, 2021, with completion currently expected in the second half of 2022.

The subsidiaries and assets being acquired will continue to be held by the company after completion. There are no implications for the Nordic Bond issued by Waldorf Production UK Limited on October 1, 2021.

“We are excited to acquire MOL’s UK portfolio and by so doing to double our stake in GCA. Pro forma for the transaction Waldorf’s 2021 production increases by circa 55 percent to around 34,000 boe per day and end 2021 2P reserves by almost a third from 51.6 mmboe to 66.5 mmboe,” Erik Brodahl, Chief Executive of Waldorf said.

“Waldorf continues to look for further growth opportunities building on its resilient non-operated North Sea production base in the near-term,” Brodahl added.

In a separate announcement, MOL said that Waldorf offered a base cash consideration of $305 million, which is subject to customary purchase price adjustments. Also, the agreement contains an earn-out scheme mainly dependent on oil prices from 2022 to 2025.

“As a result of the transaction, Waldorf will retain all future field abandonment liabilities such that on completion MOL will derecognize provisions of around $350 million. Furthermore, MOL’s average lifting cost will improve following the completion of the transaction, as the production costs of the UK assets exceed the average lifting costs of the rest of MOL’s E&P portfolio,” the Hungarian oil firm stated.

It is worth noting that the closing of the transaction was subject to obtaining necessary approvals.

Waldorf entered Catcher very recently. It bought a 20 percent interest in Catcher and 29.5 interest in Kraken from Cairn Energy in November 2021 for a cash consideration of $460 million, plus additional contingent consideration dependent principally on oil prices from 2021 to the end of 2025.

When the Cairn deal was completed, production from Waldorf’s assets went up to circa 22,000 boe per day and the company increased 2P reserves to 52 million boe as of year-end 2020.

The Catcher project is operated by Harbour Energy. It lies in the central part of the UK North Sea some 110 miles from Aberdeen. The area produces from 18 subsea wells on Catcher, Varadero, and Burgman.

The wells are connected to the BW Catcher FPSO – owned and operated by BW Offshore. First oil was produced from Catcher in December 2017. The start of production from Varadero and Burgman happened the following year.

To contact the author, email bojan.lepic@rigzone.com


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