Shell Completes Sales to Chrysaor, Carlyle
Anglo-Dutch major Shell announced November 1 it has completed the sale to separate private equity interests of its largely ex-BG North Sea package and Gabon onshore interests, booking a $1bn gain on the former.
The North Sea largely gas package was sold to Chrysaor for a total of up to $3.8bn, while the mainly oil assets in Gabon were sold to Carlyle’s Assala Energy Holdings for a total of $628mn, slightly more than announced in March.
The Chrysaor deal, announced January 31, follows receipt of all necessary regulatory approvals, and with no pre-emptions by partners. Chrysaor’s main financial backer is US private equity firm EIG Global Energy Partners. The package consists of interests in the Beryl, Bressay, Buzzard, Elgin-Franklin, Erskine, Everest, the Greater Armada cluster (excluding Gaulpe), J Block, Lomond fields and a 10% stake in Schiehallion. Shell retains a 44.9% stake in the Schiehallion oilfield. Chrysaor thus becomes the leading independent E&P company in the UK, and operator of Armada, Lomond and Everest hubs.
Chrysaor, led by CEO Phil Kirk and chairman Linda Cook, now has some 400 employees, half based in its operations centre in Aberdeen, 150 working offshore and 50 at its corporate headquarters in London. Of those, 253 staff transferred to Chrysaor from Shell upon completion – fewer than the 400 that Shell anticipated in January. Production from the acquired assets is forecast to average just under 120,000 net barrels of oil equivalent/day for 2017, with current unit operating costs of less than $15/b.
The $3.8bn price includes an initial payment of $3bn by Chrysaor, followed by payment of up to $600mn during 2018-2021 subject to commodity price, with potential further payments of up to $180m for future discoveries.
Shell said that its 4Q 2017 results, due February 2018, will include an accounting gain on the sale of $1bn against the values of both the Shell and former BG assets included in the package. In contrast it said the Gabon sale will result in a post-tax impairment for Shell of $151mn in 2017.
In Gabon, all Shell’s onshore oil and gas operations and related infrastructure will transfer to Assala: five operated fields (Rabi, Toucan/Robin, Gamba/Ivinga, Koula/Damier, and Bende/ M’Bassou /Totou), and stakes in four non-operated fields (Atora, Avocette, Coucal, and Tsiengui West), as well as associated infrastructure plus the Gamba Southern oil export terminal. Shell onshore in Gabon produced 41,000 boe/d in 2016.
Some 430 local employees have transferred from Shell to Assala Energy. But Shell retains offshore blocks BC9 and BCD10, in water-depths ranging from 100 to 4,000 metres.
Mark Smedley