United Oil & Gas Plc, the growing oil and gas company with a portfolio of production, development, exploration and appraisal assets, announces the signing of non-binding Heads of Terms on an agreement to sell UK Central North Sea Licences P2480 and P2519 ("the Licences") to Quattro Energy Limited ("Quattro") for a headline consideration of up to £3.2 million (c. US $4.4 million).
United was awarded Licence P2480, in the UK Oil and Gas Authority ("OGA") 31st Licencing Round in August 2019 and Licence P2519 in the 32nd Licencing Round, in December 2020. United holds a 100% equity interest in each. Licence P2519 includes the Maria Discovery in block 15/18. Low-cost but important data analysis, carried out by the United team, has added significant value to the Licences since award.
Quattro Energy is a new UK company incorporated in April 2021 by an experienced North Sea focused management team. The acquisition of United's CNS interests is a first step towards Quattro's objective to build a portfolio of oil & gas appraisal, development, and producing assets.
The transaction will result in an initial payment of £2 million (c. US $2.8 million) at completion. Subject to a Field Development Plan being approved for block 15/18, an additional uplift amount of £1.2 million (c. $1.7 million) will be paid to United.
This deal, which is subject to completion of satisfactory due diligence, definitive documentation and OGA approval, is expected to complete by 30 September 2021.
The divestment of these Licences, following a strategic review of the Company's portfolio, will see United exit activities in the North Sea region. The transaction proceeds will provide financial flexibility for the Company to grow its low-cost production business in Egypt and the Greater Mediterranean area, complemented with selected high impact exploration opportunities in the Caribbean and Latin America.
Brian Larkin CEO, United Oil and Gas PLC:
"With this transaction we continue to demonstrate our ability to actively manage our portfolio of assets to unlock significant return in value for our shareholders in a short period of time. In line with our stated strategy, the proceeds of this transaction will further strengthen our balance sheet to support the growth of the company".