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Chrysaor picks up second North Sea oil and gas acquisition

Chrysaor, the region's fourth largest producer, makes its second big grab since a $3 billion deal in November with Shell.

By Daniel J. Graeber
The fourth-largest oil and gas producer in the United Kingdom, Chrysaor, could put more momentum behind aging North Sea fields. File photo by Maryam Rahmanian/UPI.
The fourth-largest oil and gas producer in the United Kingdom, Chrysaor, could put more momentum behind aging North Sea fields. File photo by Maryam Rahmanian/UPI. | License Photo

March 22 (UPI) -- The fourth-largest oil and gas producer in the United Kingdom, Chrysaor, said it built up its North Sea portfolio with new acquisitions.

For an undisclosed sum, the independent producer said it signed an agreement with rival Spirit Energy to take on its shares in the Armada, Maria and Seymour fields in the North Sea. The acquisition gives Chrysaor total control over the Armada field.

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"This acquisition is part of Chrysaor's strategy to prolong asset life, maximize recovery and deliver value from its U.K. North Sea portfolio," Chief Executive Phil Kirk said in a statement. "Chrysaor can now progress its plans to realize the full potential of the fields and will shortly commence well site surveys and secure long lead items and drilling equipment."

The announcement is the company's second since it made a $3 billion deal with Royal Dutch Shell in November to acquire North Sea interests. That transaction put Chrysaor in a leadership position in British waters, adding 120,000 barrels of net equivalent daily production to its portfolio.

Operating costs are expected to be less than $15 per barrel. Brent crude oil, the global benchmark for the price of oil, was trading near $70 per barrel early Thursday.

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Fiona Legate, a research analyst for consultant group Wood Mackenzie, said the deal is unique in that Spirit Energy was planning to stop work at the assets later this year.

"However, Chrysaor is planning to implement a late-life investment project," she said in a statement emailed to UPI. "This is a prime example of getting assets into the right hands via mergers and acquisition, which is positive for the British continental shelf."

The fields sold to Chrysaor produced around 830,000 barrels of oil equivalent per day last year.

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