Waldorf pulls off two North Sea transactions

March 9, 2021
Cairn Energy has agreed to sell its interests in the producing Catcher and Kraken fields in the UK North Sea to Waldorf Production.

Offshore staff

EDINBURGH, UKCairn Energy has agreed to sell its interests in the producing Catcher and Kraken fields in the UK North Sea to Waldorf Production.

The proposed transaction comprises a cash consideration of $460 million, potentially rising depending on oil prices and production performance from 2021 to the end of 2025.

Cairn gained non-operated interests in the two field developments in 2021 via its acquisition of Nautical Petroleum.

The Catcher Area fields (Catcher, Varadero and Burgman fields), operated by Premier Oil, produced first oil in December 2017, while Kraken, operated by EnQuest, came onstream six months earlier.

Both fields, developed via FPSOs with subsea wells, are now entering a natural decline phase, according to Cairn, which has a 20% stake in Catcher and 29.5% in Kraken.

Waldorf Production is an E&P independent E&P focused on production and development opportunities in the UK North Sea. In 2019, the company acquired the assets of Endeavour Energy UK, which include the producing Alba and Bacchus fields and the Columbus field development, operated by Serica Energy.

Jon Skabo and Erik Brodahl founded the company, with support from investors.

At Catcher, the partners plan further wells soon on Catcher North and Laverda (deferred from the planned program in 2020), and potentially Burgman Far East location. Average 2020 production from the Catcher Area was 50,200 boe/d.

Kraken averaged 37,600 boe/d in 2020, including contributions from the newly online Worcester producer-injector well pair. According to Cairn, overall well performance has been good, with water cut stable.

Waldorf has also agreed to acquire a 20% interest in UK North Sea block 22/1b and 15% of block 22/1a from Ithaca Oil and Gas Ltd.

The block 22/1b license contains the Fotla prospect, where an exploration well will likely be drilled this spring.

CEO Brodahl described the agreement with Cairn as transformational for his company, lifting its production to around 22,000-25,000 boe/d, with 2P reserves of 43 MMboe.

If the Fotla well finds oil, this could be tied back swiftly to the Ithaca-operated Alba field, he added.

“Waldorf sees the North Sea as uniquely suited for disciplined small-cap E&P companies such as ourselves with well-managed, long-life assets available at attractive valuations. We continue to look for further growth opportunities in the near-term.”