EnQuest, Cairn buy First Oil's stake in North Sea Kraken field

Two partners in the North Sea Kraken oilfield, one of the few new fields expected to start up in the basin in the next 18 months, have taken over First Oil's stake in the field after the company put its assets up for sale.

EnQuest and Cairn Energy said on Monday they had acquired an additional 10.5 percent and 4.5 percent stake in the field, respectively.

The deal is one of a handful which have been agreed in the North Sea in recent months.

EnQuest, whose interest in the field has now risen to 70.5 percent, said it expected to spend another USD 90 million before its first production, which is set for the first half of 2017.

EnQuest, itself under financial strain due to the sharp drop in oil prices, said it does not expect to increase its 2016 capital expenditure target of USD 700-750 million as it had made cost reductions elsewhere.

The oil producer also said that access to additional reserves obtained through the deal meant that money available under its bank facility would rise to USD 1.2 billion, up from USD 1.1 billion.

Cairn and EnQuest agreed to waive around USD 10 million in outstanding payments from First Oil on the project, the said.

The companies paid a nominal consideration for deal, which sources close to the matter said was around one pound (USD 1.42).