(Reuters) – Oil producer EnQuest is seeking to sell stakes in several of its North Sea assets in an effort to boost cash flow in the face of a dim outlook for oil prices.
Chief Executive Officer Amjad Bseisu told Reuters the Aberdeen, Scotland-based company has launched a process to farm out a stake of 20 to 30 percent in the 4,450 barrel per day Heather/Broom field which it operates.
EnQuest currently holds a 63 percent stake in the field, while Wintershall Norge ASA [WINT.UL] has a 29 percent stake and Canadian producer Ithaca holds an additional 8 percent, according to EnQuest’s website.
EnQuest is also seeking to sell up to a quarter of its 60 percent stake in the Kraken development in the UK North Sea which is expected to start production in the first half of 2017. Cairn Energy holds a 25 percent stake in the development.
EnQuest is also aiming at finding investors for a 10 to 20 percent stake in the Scolty/Crathes development, in which it is the operator with a 50 percent interest.
“We’re looking to market part of our North Sea portfolio. We have a process to see if we can get some partners to get in,” Bseisu told Reuters.
The farm-ins will allow EnQuest to free up cash for further investment in 2017 and beyond, Bseisu said.
The company, which specialises in maximising oil output from old fields using new technology, said on Tuesday it had approved the $125 million development of Scolty/Crathes in an unusual move for a sector that is slashing costs due to oil prices close to seven-year lows.
Its shares were up 2.6 percent by 1455 GMT.
Oil and gas companies around the world have grappled with a nearly two-thirds drop in oil prices to around $40 a barrel since June 2014 which has forced many to slash budgets, scrap projects and sell assets.
EnQuest itself has adjusted maintenance schedules, cut rates for contractors and linked service providers’ payments to performance, it said.
The drop in energy companies’ valuations has also attracted investors including oil companies and private equity funds seeking to snap up assets. The UK North Sea nevertheless remains a relatively tough investment area due to high costs and taxes.
(Reporting by Ron Bousso, editing by David Evans)
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