United cancels sale of CNS assets to Quattro Energy

United Oil & Gas has canceled plans to sell a pair of central North Sea assets, after buyer Quattro Energy failed to meet extended fundraising deadlines.

United (UOG) announced the £3.2million deal to sell its PP2480 and P2519 licenses – the latter including Maria’s discovery – to newcomer Quattro Energy last July.

The deal was expected to close in September, although delays pushed it into the fourth quarter of 2021 and then into February 2022.

In a March 3 trade update, UOG said it had made the decision to end the sale.

The company added: “Completion of the sale was conditional on receipt of approval from the Oil and Gas Authority (OGA) and completion of a fundraising process by Quattro. In December 2021, United announced that the long stop date for satisfaction of SPA terms was extended until February 28, 2022.

“Although OGA approval has been received, Quattro has not completed the fundraising process by this date. United have decided to end the SPA with Quattro.

Quattro was formed in April 2021 by North Sea stalwart Neill Carson, founder of Ithaca Energy and i3 Energy.

Speaking to Energy Voice, Mr Carson said the result was “unfortunate”. He added that Quattro’s plans required considerable technical and commercial detail to secure financing, and that the necessary work could not be completed in time for the seller’s guarantee date.

UOG was awarded the P2480 license in the 31st OGA licensing round in August 2019 and the P2519 license in the 32nd licensing round in December 2020. It holds a 100% interest in each.

License P2519 includes the existing Maria discovery drilled by Shell in 1976, which UOG estimates contains approximately 6 million barrels of oil equivalent (boe) in mid-term recoverable resources.

Additionally, P2519 contains two Jurassic finds, Brochel and Maol. Maol was drilled by Shell in 1987 and in tests sank over 2000 boepd.

The P2480 license includes the Zeta prospect, which is estimated to contain an average safe in-place volume of 90 million barrels.

Both licenses are close to existing infrastructure and located in a promising area in the central North Sea. This includes the nearby Marigold and Yeoman discoveries, the former of which is the subject of a joint development project by Hibiscus Petroleum and Ithaca Energy.

UOG adds that both licenses come with “low-cost commitments” and that renewed activity in the neighboring region should translate into attractive investment opportunities.

He said he looked forward to advancing the “marketing opportunities and potential partnerships” offered by the assets.

UOG chief executive Brian Larkin said: “Although the terms of the SPA for the sale of our UK CNS assets have not been met and United have decided to terminate the SPA with Quattro, we believe that the backdrop of a high oil process and increased investment in the North Sea means that these licenses offer a range of exciting opportunities for United for limited short-term spending.

Founded in 2015, UOG is an oil and gas exploration, development and production company with assets in Egypt, the UK, Italy and Jamaica.

The company added that the sale of its Italian unit, UOG Italia, to a subsidiary of AIM-listed Prospex Energy is progressing. UOG Italia holds a non-operated 20% interest in the Podere Gallina license which contains the Selva gas development project in Italy. The transaction has a closing date of April 6, 2022.

“With our low-cost generation asset base, which is heavily impacted by the rising oil price, we remain focused on delivering our work programs from a fully funded position in Egypt, more to advance the farm out of our Jamaican assets. We look forward to updating the market on further progress in our full-year results at the end of April,” added Mr. Larkin.

recommended for you

United launches drilling campaign in Egypt

Comments are closed.