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.

Article continues below

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

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%.

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.