Apache to acquire ExxonMobil's Beryl Field
Posted: 21 September 2011
Apache Corporation subsidiary, Apache North Sea Limited, has agreed to acquire Exxon Mobil Corporation's Mobil North Sea LLC assets — including the Beryl field and related properties — for $1.75 billion.
The fields have current net production of approximately 19,000 barrels of oil and natural gas liquids and 58 million cubic feet (MMcf) of natural gas per day. At year-end 2010, estimated proved reserves totaled 68 million barrels of oil equivalent.
The transaction, with a planned close at year-end 2011, is expected to increase Apache's North Sea production by 54 percent and proved reserves by 44 percent.
The assets to be acquired include:
- Operated interests in the Beryl, Nevis, Ness, Nevis South, Skene and Buckland fields;
- Operated interest in the Beryl/Brae gas pipeline and the SAGE gas plant;
- Non-operated interests in the Maclure, Scott and Telford fields; and
- Benbecula (West of Shetlands) exploration acreage.
"These major legacy assets will expand Apache's presence in the North Sea. They bring us significant remaining life, high production efficiency and quality reservoirs — the best North Sea assets we've evaluated since acquiring the Forties Field in 2003," said G. Steven Farris, Apache's chairman and chief executive officer.
"There is a portfolio of low-risk exploitation projects, and we believe the complex structural setting holds reserve upside.
"Over the past eight years, Apache has demonstrated the ability to increase the efficiency of mature North Sea assets, find new reserves to extend field life, and operate in a safe and environmentally responsible manner," Farris said.
Since acquiring the Forties Field in 2003, Apache has drilled about 100 development wells, invested $3.2 billion, produced approximately 161 MMboe — more than the proved reserves at the time of the acquisition — and added an estimated 171 MMboe in new reserves.
Second-quarter 2011 net production from Forties averaged 56,985 barrels of oil per day, up from approximately 33,000 barrels per day in the second quarter of 2003, after Apache assumed operations.
Production from the Mobil North Sea LLC fields will add to the percentage of Apache's current output that is indexed to the premium Brent crude oil benchmark price.
Apache will take on the ExxonMobil employees currently supporting the former Mobil North Sea LLC assets. "We look forward to a new period of growth with a strong, combined team," said James L. House, region vice president and managing director of Apache North Sea Limited.
The transaction is subject to regulatory approvals and preferential rights. Apache intends to fund the acquisition with cash.
"We appreciate the opportunity to work with the ExxonMobil team to hammer out this transaction," Farris said.