Equinor takes extra slice of Caesar-Tonga

Equinor has exercised its preferential rights over Delek Group to acquire an additional 22.45% interest in the Caesar-Tonga oil field from Shell, for a total consideration of US$965 million in cash.

This will increase Equinor’s interest from 23.55% to 46.00%.  Anadarko remains the operator with a 33.75% interest, and Chevron retains its 20.25% interest.

Shell had previously agreed to sell the Caesar-Tonga assets to Delek Group, also for US$965 million. That deal was conditional upon other interest-holders agreeing not to buy the stake.

Commenting on the deal, Michael Murphy, research analyst with Wood Mackenzie's Gulf of Mexico team, said: "This provides Equinor with a great opportunity to increase working interest in an asset it already knows well. The move increases Equinor's US Gulf of Mexico 2019 net forecasted production by almost 15%, to over 100,000 barrels of oil equivalent per day."

"The project will add near term cash flow to Equinor's regional portfolio, and with operator Anadarko set to be acquired by Occidental, it could also position the company to seek operatorship of the subsea tie-back field in the future."

He added: "Our initial analysis indicated that Delek achieved an attractive deal valuation – this is further proof that the US Gulf of Mexico is still a buyer's market."

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