OMV AG (ADR) (OTCMKTS:OMVKY) is expanding its asset base in the UK core area. OMV has recently reached an agreement with Hess Corp. (NYSE:HES) to acquire four licenses in the West of Shetland (WoS) area in the United Kingdom. These four licenses include two blocks in Cambo and two others in the Blackrock prospect which have been acquired at a total cost of USD 50 million.
Cambo area in the North Sea
OMV AG (ADR) (OTCMKTS:OMVKY) has already enjoyed a presence in the Cambo area before and has expanded its share in this field from 15% to 47.5% with the new acquisition. Furthermore, OMV operates the blocks of Tornado and Suilven discoveries which are adjacent to the Cambo area. This could mean synergies for the company in managing closely located operated areas. “There are also further prospects with tie-back potential to develop Cambo as a valuable area hub,” said the Austrian company.
In the Blackrock prospect area, OMV is moving its holding in license P1830 from 25% to 75%, while it enters license P1831 for the first time with 75%.
New acquisition means growth for OMV
OMV AG (ADR) (OTCMKTS:OMVKY) is acquiring acreage which is worth 60 million barrels of oil equivalent (boe) of recoverable oil and gas products. The Blackrock area, to be drilled in 2015, is located close to Cambo and is located between Rosebank and Cambo discoveries.
“This acquisition further consolidates OMV as a major player in West of Shetland and we look forward to working with partners and the UK authorities to unlock the substantial potential in the area,” said Jaap Huijskes, OMV Executive Board member responsible for Exploration and Production. OMV already holds 22 licenses in the WoS area, including Rosebank, Schiehallion, Tornado and Suilven and an additional four licenses in the adjacent Faroe Islands.
Figure 1: OMV blocks West of Shetland
“OMV was involved in last year’s biggest North Sea transaction when it acquired stakes in Norway and the UK from Statoil ASA (STL) for $2.65 billion, including in the Rosebank and Schiehallion fields,” reports Businessweek.
The CEO of the company, Gerhard Roiss stated in the press release, “This transaction further strengthens OMV AG (ADR) (OTCMKTS:OMVKY)’s portfolio of assets in our UK focus area, West of Shetland, where we are consistently executing our strategy of unlocking value from our investments by taking larger stakes and more projects with operatorship within our upstream portfolio.”
The takeover transaction is subject to the approval of the UK Government and joint venture partners.