Norway's DNO buys 25% stake in Arran gas field from ONE-Dyas

Norway's DNO has inked an agreement to acquire a 25% interest in the Arran gas and condensate field on the UK Continental Shelf from ONE-Dyas, it said on February 6. 

The Arran field, operated by Shell, commenced production in 2021 through a subsea tie-back to the Shearwater A platform. Gas produced at Arran is routed through the Fulmar gas line to the St. Fergus terminal, while liquids are transported to Cruden Bay via the Forties pipeline system.

This transaction is poised to bolster DNO's portfolio by adding approximately 4mn barrels of oil equivalent net, predominantly comprising gas (90%). DNO anticipates a net production of 2,000-2,500 boe/day in 2024. The financial terms of the deal include a cash consideration of $70mn and a contingent consideration of up to $5mn, contingent upon meeting specific operational targets.

“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 added.

With the effective date set to January 1, 2024, the transaction is slated to conclude in the second quarter of 2024, subject to regulatory approvals. DNO's North Sea portfolio, which currently boasts 14,200 boe/d primarily from Norwegian fields, is set to expand further with ongoing development projects like Trym Restart, Andvare, and Berling.