EnQuest withdraws from Tunisia. Gets $23M back from escrow
EnQuest PLC, an independent oil and gas exploration and production company, has withdrawn from its small investment in Tunisia.
In May 2013, EnQuest announced an agreement to acquire interests in the Didon producing oil field and the Zarat permit, from Sweden’s PA Resources AB.
According to EnQuest, PA Resources was to retain a partial interest in the assets following EnQuest’s acquisition.
In August 2014, EnQuest announced that the acquisition of Didon had completed in mid-July and the consideration of $23 million was to be kept in escrow pending an appropriate response from the Tunisian authorities.
The backstop date for the transaction has now passed and the parties have elected not to extend it.
Accordingly the interest previously acquired by EnQuest has been returned to PAR, the $23 million has been returned to EnQuest and EnQuest has no future obligation to complete any acquisition pursuant to the May 2013 agreement with PAR.
Update: February 2, 12:08
In a separate statement PA Resources has said that the deal has has been called of due to the Tunisian authorities failing to send a letter of non-objection.
“Despite repeated verbal assurances from the Tunisian authorities that such a letter was imminent, none has yet been issued, ” PA Resources has said.
The company has also said that the collapse in world oil prices has meant that Didon is currently cash flow negative and this situation will worsen as wells decline until a campaign of infill drilling can be undertaken, which will require a substantial investment in the field. PA Resources has said it is currently looking at alternatives for reducing the negative cash flow from Didon, including shutting the field in until oil prices recover. The results of the Didon option planning will be shared with the company’s creditors in the context of the current refinancing negotiations, the company has added.
Offshore Energy Today Staff