Norwegian oil and gas operator DNO today (February 6) announced that its wholly-owned subsidiary DNO Exploration UK Limited has entered into an agreement to acquire a 25% stake in the Arran field on the UK Continental Shelf from ONE-Dyas E&P Limited.

 

Arran started production in 2021 as a subsea tie-back to the Shearwater A platform, both operated by Shell UK Limited. Gas from Arran is exported via the Fulmar Gas line on to the St. Fergus Terminal while liquids are exported to Cruden Bay via the Forties Pipeline System.

 

The transaction is expected to add some four million barrels of oil equivalent net to DNO, of which 90% gas, with projected net 2024 production of 2,000-2,500 barrels of oil equivalent per day (boepd). 

 

The cash consideration is $70 million plus a contingent consideration of up to $5 million if certain operational targets are met.

 

"Arran fits neatly in our strategy of acquiring bolt-on producing assets as we develop our significant discoveries in Norway," remarked Chris Spencer, DNO’s Managing Director. 

 

"The company expects financial synergies between Arran and DNO’s existing position in the UK," he added.

 

With this transaction, DNO continues to expand a North Sea portfolio that includes 14,200 boepd of production currently almost exclusively from fields in Norway which will grow as ongoing development projects notably Trym Restart (50 percent and operator), Andvare (32 percent) and Berling (30 percent) are brought onstream.

 

The company’s exceptionally successful exploration program delivered four additional discoveries and two successful appraisal wells in 2023, again in Norway.

 

The transaction is expected to close in the second quarter of 2024, subject to authorities’ approval.-TradeArabia News Service