Aberdeen-based First Oil Expro has gone into administration as the latest casualty of the collapse in oil prices.
It grew into the largest privately-owned British company producing oil and gas in the UK part of the North Sea.
Now, EnQuest and Cairn Energy will take on its 15% stake in the vast Kraken North Sea Oil field, giving EnQuest a 70.5% interest and Cairn 29.5%.
Zennor Petroleum is expected to take on its interests in the Mungo and Monan, Bacchus, Cormorant East and Causeway fields.
Part of oil tycoon Ian Suttie’s First Oil Group, the business was put up for sale at the end of last year.
KPMG’s Richard Beard, Blair Nimmo and Jim Tucker were brought in as joint administrators at the weekend. They have agreed to sell a number of the company’s assets to Zennor, a Surrey-based oil and gas company.
Zennor said the acquisitions were in line with its growth strategy and formed an “important part of its plans to become a full cycle exploration and production company operating offshore, north-west Europe.”
First Oil’s 15% stake in the Kraken Field was sold for a “nominal consideration.” EnQuest and Cairn said they would not reimburse First Oil for the costs it has incurred.
Blair Nimmo, head of restructuring at KPMG in Scotland, said: “We are delighted to announce these two company sales, which are an excellent outcome for stakeholders.
“The fact that their owner, First Oil Expro Limited, sold them via an administration process is a reflection of the significant challenges facing UK North Sea oil and gas companies in the current oil price environment.
“These sales will ensure that the group’s four largest field interests are smoothly transferred to new ownership.
“They also provide time to resolve the position concerning the smaller assets in the group’s portfolio.”
He thanked management, employees, joint operating partners, regulators and other key stakeholders for their support during the challenging period for the group.
The price of Brent crude, which yesterday hovered above $30 a barrel, is way below the level at which North Sea production is viable.