EnQuest PLC has agreed with First Oil plc the proposed acquisition of an additional 15 percent interest in blocks 9/2b and 9/2c including the Kraken oil discovery, bringing EnQuest's total interest in Kraken to 60 percent. The agreement is subject to the normal regulatory and partner consents and is also conditional on EnQuest shareholder approval.

In a similar arrangement to that for EnQuest's previous acquisition of 25 percent of Kraken from Nautical Petroleum plc ('Nautical'), EnQuest proposes to pay First Oil between $90 million and $144 million by way of a development carry in relation to First Oil's remaining 15 percent interest in Kraken. EnQuest's cash payments will be deferred and EnQuest will be entitled to receive the capital tax allowances normally available for investment in such a development project.

Tags: EnQuest PLC