North Sea oil and gas firm EnQuest has signed an agreement with the Kuwait Foreign Petroleum Exploration Company (KUFPEC) under which the EnQuest will farm out a 35 per cent in its Alma and Galia oil field developments to KUFPEC.
In return, KUFPEC will invest around $500m (£300m) in cash, which includes $182m in future contributions for past costs, as well as KUFPEC's direct share of the development costs.
Amjad Bseisu, Chief Executive of EnQuest, said: "With start up planned for late next year, the project team is well advanced in the execution phase and our first Alma well has reached total depth with good results."
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The capital cost of the project is being revised to include some additional costs relating to increased scope, intended to extend the life of the oil field. EnQuest anticipates that the cost of the development will be in the region of $1.0bn. If KUFPEC does not recover its costs by the start of 2017, then it will receive 50% of revenue - minus operating costs - until those costs have been recovered.
The company pointed out that as a result of the agreement, its anticipated peak production net to the firm, which was previously 20,000 barrels of oil equivalent per day, has been reduced by around 7,000 in 2014 and by around 1,750 in 2013. First oil is expected in the final quarter of 2013.
Enquest's share price rose 2.51% to 122.60p by 15:47.
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