North Sea firm to reinforce energy security by buying ‘one of the largest undeveloped fields in the UK North Sea’

North Sea-focused independent E&P company Waldorf Production has inked a deal to buy the entire share capital of Alpha Petroleum, an upstream oil and gas company focusing on the UK North Sea, from Shorelight Partners. The deal is expected to boost the firm’s asset portfolio and help strengthen the UK’s energy security amid the current geopolitical crisis.

Waldorf Production revealed on Monday that it had signed a sale and purchase agreement with Shorelight Partners for the acquisition of the entire share capital of Alpha Petroleum Resources. While the financial terms of the transaction were not disclosed, the company said that there are no implications for the Nordic Bond issued by Waldorf Production on 1 October 2021.

Alpha Petroleum, which acquired its first three licences in 2001, was appointed as a production operator in 2002 and achieved the first production from its Helvellyn gas field in early 2004. Three further gas fields – Kilmar, Wenlock and Garrow – were brought on stream in the period 2005-2007.

Furthermore, Alpha Petroleum’s primary offshore redevelopment asset, the Cheviot field, which is 100 per cent owned and operated by Alpha Petroleum, is “one of the largest undeveloped fields in the UK North Sea,” with estimated reserves of 50 MMBbls of oil and 120 bcf of future gas production.

Andy Crouch, Chief Executive of Alpha Petroleum, remarked: “Alpha has significantly de-risked the Cheviot redevelopment under Shorelight’s stewardship and we thank them for their valuable partnership. We are excited that Alpha’s assets will become part of Waldorf’s impressive UK portfolio and look forward to further progressing the field development and unlocking value under Waldorf’s leadership.”

Moreover, Waldorf explains that the Cheviot field further enhances its existing UK portfolio, providing “significant growth potential” to its collection of mainly producing assets. Alpha Petroleum’s operating capability will also complement the firm’s current UK organisation and portfolio which is non-operated.

Erik Brodahl, Chief Executive of Waldorf Production, commented: “We are delighted to be partnering with Andy and the Alpha team. Cheviot provides a valuable development opportunity to supplement our existing production portfolio which together with the additional gas production will increase our contribution to the UK’s much-needed energy security.”

Aside from Cheviot, Alpha Petroleum operates three producing Southern North Sea assets – Helvellyn, Tors and Wenlock – and plans to restore these mature assets and increase gas production. Therefore, coupled with the redevelopment of Cheviot, this is anticipated to help “reinforce the UK’s energy security of supply in the future.”

Waldorf further elaborates that Alpha and Shorelight have “significantly progressed” the Cheviot redevelopment over the last five years through material, technical and engineering work. In October 2018, agreements were signed with Teekay Offshore for its FPSO Petrojarl Varg for deployment to the Cheviot oil field. The North Sea-focused player outlines that this has laid the groundwork for both the advancement of discussions with other FPSO owners as well as potential tie-backs to existing infrastructure.

Daniel Reis, Founding Partner of Shorelight Partners, stated: “We are pleased to have supported Alpha and the progress of the Cheviot development, creating significant realisable value. This transaction represents an excellent outcome for all stakeholders. Shorelight will continue to focus on the vital transition of conventional energy assets into the low carbon future, such as our existing German business ONEO, as well as exciting new investments in key energy transition assets over the course of the coming year.”

This is not Waldorf Production’s first acquisition since it acquired Endeavour Energy UK in late 2019, and interests in Catcher and Kraken from Capricorn Energy in November 2021. 

In addition, Waldorf entered a binding agreement to purchase the wholly-owned subsidiaries and the entire UK business of Hungary’s MOL in March 2022, which once completed, would double the firm’s position in the Greater Catcher Area and further diversify its existing UK portfolio.