Verus Petroleum announces $400-million acquisition of E&P company

ABERDEEN -- Verus Petroleum has signed a Sale & Purchase Agreement (SPA) for the acquisition of Cieco Exploration & Production (UK) Limited, a wholly owned subsidiary of ITOCHU Corporation.

The consideration is $400 million, with an economic date of Jan. 1, 2018.

The acquisition includes a 23.1% interest in the Western Isles Development Project, a 25.8% interest in Hudson field, a 2.0% interest in the Brent Pipeline System, and a 1.2% interest in the Sullom Voe oil terminal.

The acquisition will add approximately 11,000 boed to Verus’s daily production. The acquired entity is an asset holding company and the transaction does not involve the transfer of any personnel.

The transaction will be funded by a combination of equity, existing cash reserves and debt. Equity will be provided by HitecVision, the majority owner of Verus. Verus’s leading lender Nedbank Limited supports the transaction and the existing Reserves Based Lending (RBL) Facility will be increased and amended to allow for the participation of a group of additional banks who are also supportive of the transaction.