Cairn Energy Announces Sale of its Interests in Catcher and Kraken Fields
Source: www.gulfoilandgas.com 3/9/2021, Location: Europe
Cairn has entered into an agreement that will result in the sale of its interests in the UK Catcher and Kraken fields to Waldorf Production for a cash consideration of US$460 million plus additional contingent consideration dependent principally on oil prices from 2021 to the end of 2025. The consideration is subject to adjustments for working capital and other customary interim period adjustments from the economic effective date of 1 January 2020.
Transaction Highlights
- Cairn to sell its entire 20 per cent interest in the Catcher field and 29.5 per cent interest in the Kraken field
- Firm consideration of US$460 million (to be adjusted for working capital and interim period adjustments from effective date of 1 January 2020)
- Additional uncapped contingent consideration dependent on oil prices and production performance from 2021 to the end of 2025: generating ~US$75 million at US$60 Brent and ~US$125 million at US$65 Brent (based on Cairn expected production profiles)
- Further strengthens Cairn’s balance sheet and provides flexibility to sustain and prolong the producing asset base
- Completion currently expected in H2 2021
Simon Thomson, Chief Executive of Cairn said:
'The divestment of our UK producing assets as they move into decline phase, will further strengthen our ability to pursue Cairn’s strategic goals and position the company robustly for the decade ahead.'
The disposal is a Class 1 transaction and subject to shareholder approval. Cairn will publish a circular to shareholders in due course setting out further details of the Transaction and convening the General Meeting, at which shareholder approval will be sought for the Transaction.
Rothschild & Co is acting as financial advisor and sponsor to Cairn in connection with the Transaction.