New UK North Sea oil and gas operator EnQuest, formed in a spin-off of assets by British energy services group Petrofac and Sweden’s Lundin Petroleum, is to get backing of £180million to pursue acquisitions.
Bank of Scotland, part of Lloyds Banking Group, and French bank BNP Paribas are to provide the funds for EnQuest, it was reported yesterday. BoS will provide £100million and BNP Paribas £80million.
Industry sources said EnQuest, which was floated in London three weeks ago and is already a member of the FTSE 250 Index, had already identified a number of acquisition targets.
This follows international oil and gas facility service provider Petrofac, a FTSE 100-listed company, demerging its UK Continental Shelf upstream assets in Petrofac Energy Developments to create more value for shareholders.
Petrofac owns 45% of EnQuest after contributing its West Don and Don Southwest assets and Eike discovery to the new company, and Sweden’s Lundin Petroleum owns 55% after putting its Heather, Broom, Thistle, and Deveron fields and Peik, South West Heather and Scolty finds into the new entity.
Ayman Asfari, Petrofac group chief executive, said the demerger was an important realisation of the group’s “harvest” strategy.
Amjad Bseisu, formerly chief executive of Petrofac Energy Developments, is now chief executive of EnQuest.
Trading in EnQuest shares started on April 6, opening at 97.5p. The shares closed at 105p on Friday.
Mark McCue, a divisional director at broker and wealth manager Brewin Dolphin in Aberdeen, said at the time of the flotation: “The demerger of the EnQuest business is seen as a positive move for Petrofac shareholders.
“Given that the majority of the management team at EnQuest were all part of the same business at Petrofac, the business should prosper.”
EnQuest will have 90%-plus of its 220 staff and contractors working in or out of the Granite City, based at Petrofac’s Consort House, in the city’s harbour area.
Andrew Moorfield of Lloyds, said the lending amounted to a “very significant sum for a new business”.