EnQuest, the North Sea focused oil company, is spending up to $90m for a 20% interest in the Kraken oil discovery in the East Shetland basin.
The transaction will see EnQuest buy two subsidiaries from oil and gas exploration and devlopment outfit Canamens Energy: Canamens Energy North Sea and Canamens UK 814 and 815.
EnQuest will initially pay $45 million dollars in cash and a further $45 million on approval of the Kraken "Field Development Plan" by the Department of Energy and Climate Change.
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Amjad Bseisu, Chief Executive of EnQuest, said:
"Using the operator's estimates, the Kraken blocks 9/2b and 9/2c immediately add over 30% to EnQuest's end 2010 contingent resources. It also gives us potential upside from the surrounding exploration opportunities."
Enquest shares rose 2% in morning trading. Over the last 12 months the company's stock has dropped 41%.
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