EnQuest PLC has announced that it is holding discussions with Delek Group Ltd for the sale by EnQuest to one of Delek’s subsidiaries of an interest in the Kraken development. EnQuest has confirmed that EnQuest and Delek have signed a non-binding memorandum of understanding and are working towards executing binding transaction documents. Delek will be releasing information concerning this negotiation as part of its disclosure obligations with regard to a separate transaction.
The key terms of the proposal are currently as follows:
As of yet there is no guarantee that a final agreement will be reached. EnQuest announced previously that in addition to its ongoing cost reduction initiatives, it was also pursuing a range of further opportunities for debt reduction, including potential asset sales and farm outs. The transaction is subject to EnQuest’s lending banks’ consent. EnQuest continues to closely monitor and manage its funding and liquidity position in light of the current market environment and is engaging as appropriate with its credit facility providers (including banks and bondholders) in this regard.
Note that if Delek and EnQuest agree and sign binding transaction documents, completion of the transaction would be subject to the normal third party consents. EnQuest will provide further details in the event either of transaction documents being signed or of it becoming apparent that a binding agreement cannot be reached.
Adapted from a press release by Louise Mulhall
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/18072016/enquest-plc-announces-potential-farm-out-of-20-of-kraken-to-delek/