EnQuest buys in to Kraken discovery

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%.

BS