Cairn agrees £414m deal for North Sea oil field owner Nautical Petroleum
Cairn’s recommended offer for Nautical Petroleum will increase its presence in the region and raise its stakes in fields expected to produce oil within four years.
Edinburgh-based Cairn has mainly focused its efforts on searching for oil off the coast of Greenland, although it has so far been unsuccessful, racking up a £594m bill in the past two years.
The deal will increase the company’s interest in the Catcher area to 30pc, the Kraken to 25pc, the Mariner to 6pc and Ketos to 50pc. The Catcher area, especially, contains several large oil discoveries.
It will be Cairn’s second acquisition following its $450m (£290m) move for Norwegian rival Agora Oil and Gas in April.
“This acquisition is another step towards building a balanced portfolio of transformational exploration, appraisal and development assets, and complements our recent acquisition of Agora to help build a platform in North West Europe,” said Simon Thomson, Cairn chief executive.
“Specifically, we will increase our equity position in the Catcher area, which contains several oil discoveries and follow-on prospectivity, and acquire a material stake in Kraken, another large, North Sea oil development project.
“In addition to these discoveries, this acquisition will add a number of North Sea exploration prospects to our existing 2012 and 2013 exploration programme in the UK and Norway.”
The deal is at a 51.1pc premium to the closing price of Nautical’s shares on June 12.
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.”
Cairn shares fell 1.2pc to 288.5p in early afternoon trading amid fears the company will become embroiled in a bidding war.
