North Sea Oil and Gas Operators Set for Consolidation

On the same day that Canadian independent oil and gas operator Talisman has reported that it has divested its North Sea offshore oil and gas assets to Middle East company TAQA, other major divestment projects also emerged in the news.

Danish based transport and energy company AP Moller-Maersk

In addition to Talisman, another Canadian operator has completed its divestment of main production assets on the U.K. part of the North Sea. In a statement, Grove Energy of Vancouver said that it has completed the sale of U.K. North Sea assets to EnCore Oil. Not all interest has been divested off, as Grove still has kept a 10% interest in Block 42/13 and surrounding licenses. Grove also will pay part of the ongoing drilling operations on the Block 42/13 structure, which is mainly a gas basin.

Since start of operations on the Block, which was drilled first in 1997 by Mobil, a 140 metres gross gas column has been encountered, while 3D data has shown the potential for a significant resource volume in a very large structure. The divestment of Grove assets has been paid by EnCore Oil via 9.9 million ordinary fully paid shares as consideration for selling its 30% interest in Blocks 21/22 and 21/28 in the Northern North Sea and 15% interests in Blocks 42/13 and 42/12, 42/14, 42/8 and 42/9 in the Southern North Sea. The EnCore shares received are expected to be admitted to trading on AIM on or about 22 January 2007 and are subject to a three month hold period; however, at present Grove has no plans to sell them.

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