MOL today signed an agreement with Waldorf Production Limited (“Waldorf”) covering the sale of its entire Upstream portfolio in the United Kingdom.
The divested offshore assets include MOL’s 20% stake in the Catcher field, a 50% stake in Scolty & Crathes and a 21.8% stake in Scott as well as stakes in a number of other licences. MOL’s UK working interest production peaked above 18 mboepd in 2019 and has been falling in the last two years, accordingly Q4 2021 production was marginally above 12 mboepd. MOL’s corresponding proved and probable reserves (SPE 2P) amounted to 14.9 MMboe at the end of 2021.
Waldorf offered a base cash consideration of USD 305mn, which is subject to customary purchase price adjustments and is based on an economic effective date of January 1, 2021. In addition, the agreement contains an earn-out scheme mainly dependent on oil prices during 2022-2025.
As a result of the transaction, Waldorf will retain all future field abandonment liabilities such that on completion MOL will derecognise provisions of around USD 350mn. Furthermore, MOL’s average lifting cost will improve following completion of the transaction, as the production costs of the UK assets exceed the average lifting costs of the rest of MOL’s E&P portfolio.
The closing of the transaction is subject to obtaining necessary approvals and is expected to take place in the second half of 2022.
List of divested assets:
- Greater Catcher Area 20.00%
Scott 21.83%
Telford 1.59%
Rochelle 20.71%
Scolty & Crathes 50.00%
Broom 29.00%
Cladhan 33.50%*
Brent Pipeline System 1.77%
Sullom Voe Terminal 0.72%
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