Verus moves to next phase of ambitious growth plan
Verus Petroleum is moving on to a new phase of growth, having secured a 12-fold increase in its production – from 1,500 to 18,000 barrels per day in less than a year – through drilling and key acquisitions on the UKCS.
The HitecVision-backed independent operator has recently completed three significant acquisitions; an interest in the Babbage gas field acquired from Premier Oil; Cieco Exploration & Production (UK) Limited acquired from Itochu, and Equinor’s Alba field interest.
These three deals, each with an economic date of 1st January 2018, were funded by a combination of equity, existing cash reserves and debt.
Together with the drilling of two wells on the Boa field, the acquisitions add approximately 17,000 barrels of oil equivalent (boe) to Verus’s daily production, materially increasing Verus’s cash flow.
Alan Curran, Chief Executive of Verus Petroleum said: “We are delighted to have completed these transactions which are aligned with our strategy to expand our production base and cash flow through the acquisition of high-quality production assets.
“Long-term, our aim is to build a full-cycle E&P company of scale. We now have a diversified portfolio of high-value barrels with low lifting costs in predominantly long-life fields with very strong cash generation, giving us the platform to achieve that aim.
“Our acquisition in the Boa oil field in 2017 announced our arrival; the completion of these three deals – within a matter of months – is a strong show of our resolve to become one of the leading independents in the basin.”
Mr Curran adds that the business has a strategic goal to secure operatorship of assets in the short-to-medium term, utilising the company’s technical and operational expertise to secure commercial success.
On 14th November 2018 Verus signed an amended and restated Reserves Based Lending Facility (RBL) with seven international banks. The RBL has been increased to $500 million and, with the strong support received from the banks and HitecVision, the company has access to material funds to finance further Growth.