In 2015, the Group carried out a strategic review of its operations following the sharp falls in the oil price which have dominated the sector over the past year. In late 2015, the Group commenced a sale process for the business and its constituent parts.
Shortly after their appointment, the joint administrators executed a conditional sale agreement with Zennor Petroleum Limited for the sale of Expro’s interest in a number of assets including two subsidiary companies, First Oil and Gas Limited (“FOGL”) and Antrim Resources NI Limited (“ARNIL”). These two companies remain outside of administration and, once certain formalities have been completed over the next two weeks, will then be wholly owned by Zennor.
The conditional sale agreement provides for the transfer of the Group’s interest in the following North Sea producing fields: Mungo & Monan, Bacchus, Cormorant East and Causeway; in addition to the undeveloped discoveries Glenn and Platypus. Prior to the appointment of the joint administrators, FOGL executed a sale in relation to its interest in the Kraken oil field to the other joint operating partners of the field. The joint administrators are in discussions to resolve the position on First Oil’s remaining assets.
Jim Tucker, joint administrator and restructuring partner at KPMG, said: “We are delighted to announce these two company sales today, which are an excellent outcome for stakeholders. The fact that their owner, First Oil Expro Limited, sold them via an administration process is a reflection of the significant challenges facing UK North Sea oil and gas companies in the current oil price environment. These sales will ensure that the Group’s four largest field interests are smoothly transferred to new ownership, and provide time to resolve the position concerning the smaller assets in the Group’s portfolio.
“We would like to express our gratitude to management, employees, joint operating partners, regulators and other key stakeholders for their support during this challenging period for the Group. These sales are the culmination of many months’ work across that group maximising value for the Company’s stakeholders."
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.