DNO acquires interest in Shell-operated field offshore UK, increasing North Sea production
(WO) – DNO ASA, a Norwegian oil and gas operator, announced that its wholly-owned subsidiary DNO Exploration UK Limited has entered into an agreement to acquire a 25% interest in the Arran field on the UK Continental Shelf from ONE-Dyas E&P Limited.
Arran started production in 2021 as a subsea tie-back to the Shearwater A platform, both operated by Shell U.K. Limited. Gas from Arran is exported via the Fulmar Gas line on to the St. Fergus Terminal, while liquids are exported to Cruden Bay via the Forties Pipeline System.
The transaction is expected to add some 4 MMboe net to DNO, of which 90% gas, with projected net 2024 production of 2,000-2,500 boed. The cash consideration is $70 million plus a contingent consideration of up to $5 million if certain operational targets are met.
“Arran fits neatly in our strategy of acquiring bolt-on producing assets as we develop our significant discoveries in Norway,” said Chris Spencer, DNO’s Managing Director. “The Company expects financial synergies between Arran and DNO’s existing position in the UK,” he continued.
With this transaction, DNO continues to expand a North Sea portfolio that includes 14,200 boed of production almost exclusively from fields in Norway, which will grow as ongoing development projects, notably Trym Restart (50% and operator), Andvare (32%) and Berling (30%), are brought onstream.
The company’s exceptionally successful exploration program delivered four additional discoveries and two successful appraisal wells in 2023, again in Norway.
