Oil and gas company Hague and London Oil (HALO) said it has reached an agreement to acquire a group of assets in the Dutch and UK sectors of the North Sea from ONE-Dyas (OND).
These interests consist of 7.9% of the Sillimanite Development Unit, straddling the Dutch and UK median line in the North Sea; 0.85% of the Joint Development Area (JDA); 2.34% of the Western Gas Transmission (WGT) pipeline system, including the onshore Den Helder gas processing facilities; and, 4.167% net profit interests (NPl) on blocks in and adjacent to the JDA, from OND.
The deal, which remains subject to third party, regulatory and government approvals, would become effective as of January 1, 2019.
HALO said it plans to pay a purchase price to OND of €8.85 million ($9.7 million) funded through existing cash resources of the company, structured finance associated with the existing and expanded portfolio or secured lending against hydrocarbon gas volumes within HALO's portfolio.
The proposed acquisition will increase HALO’s interests in the JDA and WGT to 10.80% and 11.22% respectively and a new entry with 7.9% of the Sillimanite Development Unit comprised of 11.73% Block 44/19a (UK (includes the Sillimanite West Discovery)) and 7.037% Block D12b (Netherlands).
Additionally, the proposed acquisition removes a financial burden on the company’s existing JDA stake plus adding NPI on other participants in: K8, L13 and Partial Block L12. Once completed, the proposed transaction would immediately add ca. 2mmboe of reserves and an estimated 800-1,000boepd of production by the fourth quarter of 2020.
Andrew Cochran, HALO Chairman & Interim CEO, said, “This proposed acquisition represents a unique opportunity to add to the existing portfolio as well as expanding it within HALO’s established ‘core’ areas, including transportation and infrastructure. Sillimanite is already under development and would add materially to the company’s production profile next year as well as adding reserves immediately upon a successful closing; also, the proposed acquisition would establish HALO’s first production in the UK ahead of the Greater Pegasus Area development project.”