Independent Oil & Gas acquiring disused North Sea pipeline

Development and production-focused oil and gas company Independent Oil and Gas announced on Monday it has signed a memorandum of understanding regarding the 100% acquisition of a currently disused pipeline in the Southern North Sea, for a nominal consideration.

The AIM-traded firm said the pipeline will provide the proposed export route for its Southern North Sea assets.

It said the MOU contains exclusivity provisions until 28 February, Independent’s board said, with discussions regarding the sale and purchase Agreement at an advanced stage with all parties reportedly committed to completing this documentation and concluding the acquisition “at the earliest opportunity”.

Independent said it will assume operatorship of the pipeline at completion, and the liability for future decommissioning.

Under the terms of the agreement, Independent would also acquire the associated onshore reception facilities.

It said it plans to use the pipeline as the main export route for all of its Southern North Sea gas assets.

“This pipeline will be the cornerstone of our Southern North Sea portfolio which, subject to remediation, will enable us to deliver our approximately 0.5 trillion cubic feet of gas resources to the UK market,” said CEO Mark Routh.

“During a period of relatively low gas prices we have bought, at very attractive prices, quality assets which were considered effectively stranded.”

Routh said, subject to completion of the acquisition, full ownership and control of the export route would create significant value for the company, especially given the recovery in UK gas prices.

“Owning our gas portfolio and export infrastructure 100% will enable us to accelerate both the development planning and funding processes.”