Oil and Gas production and development company EnQuest PLC (LON: ENQ) said on Monday that it has signed a share purchase agreement with Whalsay Energy Holdings Limited to purchase their 100% equity interest in the P1078 licence containing the Bentley heavy-oil discovery.
EnQuest shares are trading 2.38% higher at 16.36p following the announcement. So far in 2021, its share price has gained 44.7%.
The oil discovery is within 15 km of EnQuest’s Kraken and Bressay interests, with the company saying it offers “further long-term potential development opportunities and other synergies.”
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EnQuest will acquire Whalsay’s subsidiary, Whalsay Energy Limited, which holds the licence as its only asset on a cash, liability and debt-free basis.
The London listed company will fund certain accrued costs and obligations of Whalsay Energy, expected to amount to less than $2 million. There are no other upfront considerations payable. EnQuest will make deferred payments to Whalsay based on future revenues generated, which are capped at $40 million.
At the time of its last audit at the end of 2019, Whalsay Energy had gross assets valued at around $95 million, consisting of intangible assets representing historic capitalised exploration and evaluation activities on the Bentley licence.
For the year ended 31 December 2019, Whalsay Energy recorded a loss before tax of around $72 million due to the recognition of an impairment charge against the Bentley licence.
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