Endeavour International, www.endeavourcorp.com – the independent oil and gas exploration firm focusing on the North Sea and the US, announced the signing today of a definitive agreement with Bayergas Norge AS subsidiary, Bayergas UK Ltd., effectively selling the Company’s Cygnus asset in the North Sea’s Southern Gas Basin for reported $110 M cash.
Unburdened by any current tax payable, the cash proceeds will be directed towards the development of END’s Bacchus and Rochelle projects in the North Sea, as well as the onshore Haynesville shale project in the US.
With closing projected in the next 60 days, pending approval by the Boards of both companies and subject to few government and joint venture partner approvals, END can look forward to being fully capitalized as development proceeds elsewhere.
Chairman and CEO of END, William L. Transier, commented on the strong cash position the deal puts the Company in, projecting near-term production and cash flow growth as natural results, and thanked strategic advisors Jefferies International Limited and Lambert Energy Advisory Ltd. for helping to negotiate the agreement.
Transier noted how the already-successful US initiative has increased overall daily output by END to 6k BOPD (roughly 50% from the US), calling this transaction the perfect step towards consolidating North Sea operations for similar output increases. Near-term profitability for END appears to be attainable, as the previously mentioned Haynesville play of Louisiana just saw the third high-volume output well successfully completed in the Woodardville Field (22.6M cubic feet/day on a 24/46 choke at roughly 8k lbs of pressure).
Substantial development potential for North Sea operations should flesh out the earnings nicely, and with plenty of cash to throw around after this deal, END should prove its earnings potential to investors very soon.