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UK-listed EnQuest to buy Canada's Stratic for $132 million

https://www.chemnet.com   Aug 04,2010
Recently listed North Sea upstream company EnQuest has agreed to buy
Canadian-based producer Stratic Energy for a total of C$135 million ($132
million) in a stock-and-debt deal, boosting its reserves in the North Sea,
EnQuest said Tuesday.


EnQuest was only created in March and brought together the North Sea
assets of Sweden's Lundin Petroleum and the UK's Petrofac.


The agreed deal with Stratic, whose main assets are in the UK and Dutch
sectors of the North Sea, increases EnQuest's North Sea reserves by 7.3
million barrels of oil equivalent, EnQuest said.


Two of the most significant assets held by Stratic are its 19% interest
in the Crawford field, with 5 million boe of reserves, and its 17.25% interest
in the 2.34 boe West Don oil field, which EnQuest operates and in which it
already has a 27.7% working interest.


"The acquisition of Stratic is in line with our strategy to deliver
sustainable growth in shareholder value through the exploitation of existing
reserves and pursuit of selective acquisitions," EnQuest CEO Amjad Bseisu said
in a statement.


"The acquisition of Stratic provides a meaningful 7.27 million boe
increase in our reserves in the North Sea. It immediately enhances our
production profile, it consolidates EnQuest's working interest in West Don and
it adds a working interest in the Crawford development to our asset base,"
Bseisu said.


The purchase price, which was a 70% premium to Stratic's share price the
day before the deal was agreed, equates to $11.20/b of reserves, EnQuest said.


The $132 million price tag includes some $75 million of Stratic's debt,
the company said.


EnQuest said at the time of its creation it was targeting 18,000 b/d
production for 2010, but with the additional 17.25% working interest in West
Don, EnQuest believes it can add some 900 b/d from the date of deal
completion, seen in 2-3 months.


"Further additional production will be provided when the Crawford field
starts production, estimated by EnQuest to be in 2013," it said.


Stratic, which also has assets in Slovenia and Morocco, posted production
in 2009 of 1,169 boe/d.
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