Malaysia: EnQuest Buys Exxon’s Offshore Stake

EnQuest PLC, through its wholly owned subsidiary EQ Petroleum Production Malaysia Ltd, is to acquire ExxonMobil Exploration and Production Malaysia Inc.’s interest in the Seligi oil field and the PM8 PSC, located offshore Malaysia.

The agreement is subject to the approval of Petroliam Nasional Berhad (PETRONAS) and satisfaction of certain conditions precedent.

This acquisition is another step in the execution of the Company’s strategy to extend its international footprint in Malaysia. Following completion, the acquisition will contribute approximately 5,000 Boepd of net production and 11.0 MMboe of net 2P reserves to EnQuest. EnQuest has extensive experience in creating value from late stage maturing assets in the North Sea, now being extended to enhance recovery from these Malaysian assets.

Highlights

- EnQuest will take over operatorship from ExxonMobil on completion;
- EnQuest and Petronas Carigali Sdn Bhd will each hold a 50% participating interest from completion;
- Following completion, the transaction is estimated to contribute an additional 5,000 Boepd to the Company’s net production and 11.0 MMboe to net 2P reserves;
- This acquisition will be the Company’s third project in Malaysia;
- The economic date of the transaction is 1 January 2014 and the US$67.0 million cash consideration is to be subject to an interim period adjustment on completion.

The current PM8 PSC is due to expire on 30 June 2014. It is a condition to completion that the Company will enter into an agreement with PETRONAS for the continuing development and production of petroleum resources from the PM8 PSC and Seligi oil field until 2033.

EnQuest’s CEO, Amjad Bseisu, said: “I am delighted to announce this acquisition which builds on our core skill of enhancing value from maturing fields. This acquisition follows from our recent partnership with PETRONAS on the Tanjong Baram field and is a significant expansion to our Malaysian operation. I look forward to deepening our relationship with PETRONAS and adding further opportunities in Malaysia.”

As part of the transaction, EnQuest will also enter into a transition services agreement with ExxonMobil to provide for the smooth transfer of the assets.