Nautical Petroleum Share Discussion Threads

[lucky_punter] 10/1/2012 07:43

Nautical Petroleum (LON:NPE) is planning to sell some of its equity in the Kraken heavy oil discovery in the North Sea, according to Oriel Securities.
The comments come after fellow North Sea oil firm Enquest (LON:ENQ) today agreed a US$90 million deal to acquire a 20 per cent stake in the prospects from Canamens Energy.
Nautical is the operator of Kraken and has a 50 per cent stake. Kraken is estimated to contain 160 million barrels of oil. The other stakes are owned by First Oil and now Enquest.

[robbie12] 10/1/2012 07:31

Is that Oriel figure wrong. "Deal value NPE stake in Kraken at $160 million - £100 million." - 1) How did they take $90 million for 20% and get $160 million for 50%? 2) If its right its much worse than my $260 million figure. 3) First Oil is likely to try to farm out/sell down when the capex/development hat comes round.
Been a long term holder here but making me wonder.

[steelwatch] 10/1/2012 07:21

...may be a delay:

Following adverse weather conditions offshore, Valiant now anticipates that the Sedco 711 semi-submersible rig will arrive to drill the Orchid prospect (Valiant, 30%) in the middle of the first quarter.

[steelwatch] 09/1/2012 22:02

Rig identified Sedco 711 and PMO says Q1 also.

[steelwatch] 09/1/2012 21:58

Q1 apparently according to the last presentation, though, as you know, Nautical is not the operator.

[pigeon1] 09/1/2012 21:38

crazy cheap tho...

[pigeon1] 09/1/2012 21:38

agreed Steel been a tough run in oilers

When you reckon Catcher will kick off is it Q2?

Maybe i've got a few weeks yet to sit out of these?

[bwanabanana] 09/1/2012 17:00

Enquest bought Stratic for the Crawford Field

They subsequently got another 30 per cent for a carry from Fairfield and assumed operatorship.

Pretty clear what the next move shall be. Also explains why NPE have are changing their focus - gives them something to do when Enquest take up the reigns




BWANA

[steelwatch] 09/1/2012 15:18

Nautical Petroleum (LON:NPE) is planning to sell some of its equity in the Kraken heavy oil discovery in the North Sea, according to Oriel Securities.

The comments come after fellow North Sea oil firm Enquest (LON:ENQ) today agreed a US$90 million deal to acquire a 20 per cent stake in the prospects from Canamens Energy.

Nautical is the operator of Kraken and has a 50 per cent stake. Kraken is estimated to contain 160 million barrels of oil. The other stakes are owned by First Oil and now Enquest.

The price Enquest paid values Nautical's stake in the project at US$160 million.

Nautical is aiming to have a field development plan (FDP) approved for Kraken in the second half of this year. But in order to fund the project it may look to sell some of its interest in the asset, Oriel said today.

"Our understanding is that Nautical are planning to look to sell a 15 per cent stake in the field with the proceeds used to help finance the development of its remaining share in the asset along with Catcher," analyst Richard Rose said in a note.

"The FDP for Kraken is expected to be approved in H2 2012 although this is obviously dependent on the development being fully funded by all partners."

Numis Securities analyst Sanjeev Bahl believes Enquest may attempt to buy a larger stake in Kraken in the future due to the firm's stated strategy of having 'significant operated interests in its core assets'.

Bahl believes that Kraken will become an important component of the Enquest portfolio.

"In our view, the deal demonstrates that value accretive North Sea asset transactions can be executed in the current oil price environment if a company has the cash resource to fund development as well as the technical expertise and manpower," Bahl said.

The analyst also says that acquiring Kraken more than offsets the disappointment of Enquest's Tudor Rose appraisal well, which had mixed results in December.

Enquest paying Canamens an initial US$45 million upfront and a further US$45 million subject to the approval of the field development plan by UK Department of Energy and Climate Change (DECC).

"Enquest is without doubt a better partner to have involved in the Kraken project than Canamens, given its balance sheet and operational credentials in the UK North Sea," Andrew Matharu, head of oil and gas at Westhouse Securities, said in a note.

The broker adds: "A key question for Nautical is whether the company has missed an opportunity to sell down part of its holding in Kraken for a better valuation than that achieved from Statoil (when it sold a 20.67 per cent stake in the Mariner prospect), or whether today's announcement will generate further interest in the asset, enabling Nautical to exit the project in a manner similar to its involvement in the Mariner field."

[texas tea] 09/1/2012 14:50

Nautical Petroleum may sell part of Kraken stake, says broker ORIEL
January 09. at 2:11 pm

[loglorry1] 09/1/2012 14:39

Selling 25% of Kraken to Enquest would solve a lot of NPE's problems regarding development of the field. However I'd like to see them get a bit more than $3/bbl. I assume once FDP is granted they should get a bit more as it is further de-risked. Canemans were a distressed seller so they should get a little bit more. $5/bbl would be a decent result.

The read across to XEL is interesting as $5/bbl for Bentley would imply a pretty big market cap for XEL.

Perhaps NPE can do some sort of deal on Catcher with Enquest too although with PMO taking on EO's share there would be some conflict for operatorship.

Log

[lanaken] 09/1/2012 14:31

Yeah the Enquest presentation I looked at a few weeks back talks about building material positions. I can see them buying 25% from NPE and taking operatorship after the FDP approval.

They have the technical and financial clout to push the project forward quickly.

repo

[steelwatch] 09/1/2012 14:17

"EnQuest moving in strengthens the partnership there and endorses the commerciality of the project moving forward," Canaccord analyst Lindsay Wheeler says.

[steelwatch] 09/1/2012 11:20

Numis Securities analyst Sanjeev Bahl believes that Kraken will become an important component of the EnQuest portfolio.

"In our view, the deal demonstrates that value accretive North Sea asset transactions can be executed in the current oil price environment if a company has the cash resource to fund development as well as the technical expertise and manpower," Bahl said in a note to clients.

The analyst also says that acquiring Kraken more than offsets the disappointment of the Tudor Rose appraisal well, which had mixed results in December.

Furthermore he believes EnQuest may attempt to buy a larger stake in Kraken in the future as it has a stated strategy of having 'significant operated interests in its core assets'.

[steelwatch] 09/1/2012 10:56

Robbie - not sure how you can ascribe a value for Kraken to this:

EnQuest PLC ('EnQuest') today announces that it has agreed with Canamens Limited to acquire two of its companies...

Presumably the eventual total purchase price will allow for both assets and losses accumulated to date. It is also a fairly safe bet that Canamens is a distressed seller.

[robbie12] 09/1/2012 10:47

I'm a tad disappointed:

1) It does assign a market value to Kraken but not a great one.

2) Enquest in the full release certainly implies that they are not interested in upping their stake by buying NPE. So only really leaves Statoil that has Mariner to deal with.....

[steelwatch] 09/1/2012 10:37

Good to see Enquest aboard for me as both an NPE an ENQ holder.

[robbie12] 09/1/2012 10:16

$90 million for 20% plus pre-tax benefit of 28% of $55 million = $15 million

= $105 million for 20% = $263 million for 50% / 1.54 = £171 million = value of Nautical stake assuming field development approval...on the basis of this transaction.

[lanaken] 09/1/2012 08:03

Yep it's great news indeed. One of my few real worries about my sizeable NPE stake was the lack of competition for Statoil in setting up the heavy oil hub around Bressay, Mariner, Kraken and Bentley. If there's only one buyer in the market then they can afford to wait and pick up assets way too cheaply. That's not the case any longer and ENQ have great cash resources and enormous future cashflow.

repo