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Total in $635m UK North Sea assets sale

Oman-based group and Norway's HitecVision team up to take former Maersk Oil assets

Total has sold off a raft of UK North Sea assets formerly owned by now-acquired Maersk Oil to a pairing of Norwegian private equity player HitecVision and an Omani group.

The French supermajor is selling the non-core field stakes to Petrogas NEO UK, which is a partnership between Oman's Petrogas and HitecVision, in a deal worth $635 million.

All of the assets being sold are in the eastern North Sea and include 100% Total-operated fields Dumbarton, Balloch, Lochranza and Drumtochty. The first three comprise the Quad 15 area and include the Global Producer III floating production, storage and offloading vessel.

Also swapping hands are Total's 66.97% stake in the Affleck field, its 65.94% interest in the Flyndre field and its 60.6% holding in the Cawdor field.

Stakes in a trio of CNOOC International-operated fields are also being let go - Golden Eagle (31.56%), Scott (5.16%) and Telford (2.36%).

All the assets were acquired by Total when it bought Danish player Maersk Oil for $7.45 billion in a deal that closed last year.

In a joint statement, HitecVision and Petrogas said the assets include an operator organisation of more than 110 employees and contractors.

"Given the company’s growth plans and other opportunities, Petrogas NEO intends to build on the current Aberdeen presence of Total and no redundancies are expected as a result of the transaction," the pair said.

The companies also said the acquired assets are expected to have average production this year of 25,000 barrels of oil equivalent per day.

"HitecVision and Petrogas intend the acquired business to form the foundation of a larger UK E&P company," they added.

"This transaction is the starting point for a European focused full-lifecycle energy platform, positioning the new company as a substantial independent producer in the UK continental shelf with material built-in upside."

They added: "The assets to be acquired contain several organic growth opportunities, including infill drilling and development of discoveries close to existing infrastructure, and there is a potential for significant investments and increased activity in the years ahead."

Petrogas NEO UK has an aspiration to grow production to more than 100,000 boepd over the next two to three years, through both organic and inorganic growth.

Total's president, exploration & production, Arnaud Breuillac, said: "This transaction is consistent with our portfolio management strategy, aiming at lowering our break-even point by optimising capital allocation and divesting high technical costs assets.

"Our primary objective is to maintain the organic break-even before dividend below $30 per barrel and high-grading our portfolio will help us achieve this."

Petrogas is the upstream wing of Omani conglomerate MB Holding.

The company already has assets in the Danish, German, Dutch and UK sectors of the North Sea.

In the UK, the assets are blocks P2184, P2091 and P202; in the Netherlands they are blocks A/B, P/Q and the Schagen block; off Denmark they are blocks 12/06, 4/16 and 5/1; and off Germany it has Block B20008/73.

Elsewhere, it has acreage in Oman, Egypt, Mozambique and Somaliland.

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