Korea National Oil Corp. (KNOC) has sold some of its assets in the North Sea to secure liquidity worth up to US$300 million.
The oil company announced on Jan. 7 that its U.K. subsidiary Dana has signed a contract to sell off 25 percent of its stake in the North Sea Tolmount Project to Premier Oil of the United Kingdom.
The Tolmount Project is a development-stage gas field project with Dana and Premier Oil each having a 50 percent stake in the project. The project site is about 50 km east of the central coast of the United Kingdom. KNOC has yielded successful results in subsequent explorations since the acquisition of Dana in 2011. The Tolmount Project's resource reserves are estimated at 89 million barrels of oil and production facilities are under construction with the start of production slated for the end of this year.
When the stake sale is completed, Dana is expected to reduce its stake from 50 percent to 25 percent and receive up to US$300 million -- US$250 million in proceeds from the sale and US$50 million in settlement for investment already made. Premier Oil, which currently owns the operation right, will be able to enhance efficiency in project management by acquiring additional stakes. At the same time, Dana will increase liquidity and improve its financial structure by selling off the stake to the partner that knows the proper value of its assets.