Hungarian-based oil and gas company MOL has finalized the $375-million acquisition of 14 offshore oil licenses in the North Sea from German BASF’s Wintershall subsidiary.
The transaction, originally announced in mid-December, is a strategic play for MOL, which is seeking to boost its offshore presence and expansions efforts in the North Sea region.
MOL expects the acquisition—which also includes an agreement for joint exploration and production in the Middle East--will increase the company’s proven and probable reserves by 28 million barrels of oil equivalent and its best estimate of contingent resources by 9 million barrels of oil equivalent.
MOL also plans to take part in the upcoming licensing round in the North Sea and is seeking to become an operator in the region, according to a statement by MOL exploration/production chief Alexander Dodds.
For now, MOL’s regional portfolio includes only non-operated equity stakes, with a 29% interest in the Broom field, a 20% interest in the Catcher field, 33.5% in Cladhan, and 50% in both the Scolty and Crathes fields.
Oil production from the Broom area will contribute roughly 1,000 barrels of oil equivalent a day to MOL’s portfolio this year, while the new acquisitions are expected to boost that by another 6,000 bpd in 2015.
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The Cladhan field began design phase in January last year, operated by TAQA Bratani, is expected be operational in early 2015.
The combined peak production of the assets is expected to reach 16,000 to 18,000 barrels a day in 2018 and have peak production through 2019.
The North Sea is increasingly important to MOL, which recently announced that it had cut its crude oil production forecasts largely because of lower-than-expected output in its Kurdistan assets, in northern Iraq.
While Kurdistan has been somewhat minimized in MOL’s portfolio, the North Sea, Pakistan and the former Soviet states are being brought into clearer focus in the company’s expansion plans.
Now operating in over a dozen countries, MOL’s production dropped 10% over 2013, while its fourth quarter 2013 net income dropped by almost half, to $21.8 million.
By James Burgess of Oilprice.com