Omani oil producer Petrogas has pulled out of a $635 million joint deal with Norwegian investor HitecVision to buy North Sea assets from Total.
French major Total has renegotiated the selling price with HitecVision based on current oil prices which have halved from more than $60 as barrel when the deal was struck last July.
Financial details were not disclosed in statements today by Total and HitecVision, a private equity fund whose portfolio of offshore assets was last year valued at around $5.5 billion. It is buying the Total assets through its portfolio company NEO Energy. The deal is expected to be completed by the third quarter of this year.
Jean-Pierre Sbraire, chief financial officer at Total, said: “We have worked closely with HitecVision and its portfolio company NEO Energy to reconfirm our mutual commitment to completing the deal. The agreed revisions respond to current market conditions while retaining the majority of the value of the transaction. The structure of the consideration and phasing of payments has been modified, including interest-bearing vendor financing and earnout arrangements.
“We look forward to progressing swiftly to completion and for NEO Energy to take over operations. We are confident that this sale is the right thing for both parties and for the business and its employees.”
The assets changing hands include 100% of Dumbarton, Balloch, Lochranza and Drumtochty, shares in and operatorship of the Quad 15 and Flyndre and shares in the non-operated Golden Eagle and Scott/Telford areas. HitecVision said last year the acquisition would make the venture one of the 20 biggest operators in the UK Continental Shelf.
