Cairn unveils £414m oil field offer
The enduring value of the North Sea has been highlighted after an oil explorer unveiled a £414 million deal for a slice of the region's most promising fields.Cairn Energy's recommended offer for Nautical Petroleum will ramp up its presence in the North Sea and increase its stakes in fields expected to produce oil within four years.
Its investment in the region, which for decades has boosted the UK's economy and powered homes, follows BP's recent green light for a £4.5 billion project off the west of the Shetland Islands.
Edinburgh-based Cairn has focused much of its efforts on searching for oil off the coast of Greenland in recent years, although it has so far been unsuccessful, racking up a £594 million bill in the past two years.
But more recently it has broadened its focus to closer to home as it looks to secure a steady supply of oil in the near term.
The acquisition would double Cairn's stake in the Catcher area, east of Scotland, which contains several large oil discoveries, and give it a 25% stake in Kraken, east of the Shetland islands, which are both expected to produce oil by the end of 2015.
In addition, it would include a number of North Sea exploration prospects.
Nautical Petroleum operates six licences and has interests in another 24 in the UK, Ireland and France.
It is set to be the company's second acquisition following its 450 million US dollar (290 million) move for Norwegian rival Agora Oil and Gas in April.
Thomas Martin, an analyst at Canaccord Genuity, said: "We view this as a good deal for Cairn, increasing exposure to a core asset and adding a further development project. We also view the deal as positive for the North Sea."
The acquisition would double Cairn's stake in the Catcher area, east of Scotland, which contains several large oil discoveries, and give it a 25% stake in Kraken, east of the Shetland islands, which are both expected to produce oil by the end of 2015.
In addition, it would include a number of North Sea exploration prospects.
Nautical Petroleum operates six licences and has interests in another 24 in the UK, Ireland and France.
It is set to be the company's second acquisition following its 450 million US dollar (290 million) move for Norwegian rival Agora Oil and Gas in April.
Thomas Martin, an analyst at Canaccord Genuity, said: "We view this as a good deal for Cairn, increasing exposure to a core asset and adding a further development project. We also view the deal as positive for the North Sea."
© 2013 Press Association