Miscellaneous

TAQA expands North Sea position with acquisition of BP assets

WAM Abu Dhabi, Nov 28th, 2012 (WAM)–Abu Dhabi National Energy Company PJSC (TAQA), today agreed to buy from BP oil and gas assets in the UK North Sea worth more than $1 billion.

This investment secures thousands of jobs that TAQA supports in the North Sea, and reinforces the status of TAQA, a company based in Abu Dhabi, as the leading UAE investor in the UK. It follows a constructive dialogue between the oil and gas industry and the UK Treasury, that resulted in changes to the tax treatment of North Sea assets.

Hamad Al Hurr Al Suwaidi, Chairman of TAQA, Chairman of Abu Dhabi Department of Finance and Member of the Executive Council of Abu Dhabi Emirate said: “We are pleased to have this opportunity to continue investing in our UK business. This investment shows our commitment to the future of the North Sea. It is underpinned by the UK Government’s commitment to long term fiscal stability.” Welcoming the announcement, Prime Minister David Cameron said: “I’m delighted that following my recent visit to Abu Dhabi to spearhead greater commercial ties, TAQA has decided to invest in their North Sea operations. This is a vote of confidence in the UK economy and once again, highlights the North Sea’s position as a global energy hub. We’re committed to making Britain the investment destination of choice and today’s announcement shows how recent changes to the North Sea tax regime are helping to create and sustain thousands of jobs in Scotland and across the rest of the UK, ensuring we thrive in the global race.” Carl Sheldon, Chief Executive Officer of TAQA, said: “This investment is a great strategic fit for TAQA, ensuring growth for our UK business and establishes TAQA as a leading operator in the UK North Sea.” The UK Chancellor of the Exchequer, George Osborne, said: “Oil and gas is one of the UK’s greatest industrial success stories, supporting a third of a million jobs. That is why we’ve introduced measures to give companies the certainty they need for continued investment in the North Sea, and to ensure we get the most out of existing fields and infrastructure in the UK Continental Shelf. I welcome TAQA’s announcement today, which shows that the action we’ve taken is making a real difference.” The acquisition consists of interests in the Harding (70%), Maclure (37.03%), and Devenick (88.7%) fields in the Central North Sea. TAQA will also increase its non-operated interests in the Brae area and associated transport infrastructure including the SAGE system, Forties-Brae and Forties-Braemar pipelines.

On completion, the acquisition is expected to increase TAQA’s net production by approximately 21,000 barrels of oil equivalent per day (boe/d), and will add a second major development hub to TAQA’s UK North Sea business, which is currently centred around the Northern sector.

Leo Koot, Managing Director of TAQA’s UK operations, said: “This transaction will provide us with new exploration and development opportunities in the central sector of the UK North Sea. By leveraging the skills we have built in developing mature North Sea assets, we are confident we can safely generate significant value from these assets over many years to come.

“This acquisition opens up new investment opportunities for TAQA, such as infill drilling on Harding, the ability to unlock significant discovered gas resources together with other adjacent field owners, and the development of the Morrone field, for which a field development plan will be submitted in the very near future.” The total consideration for the transaction is $1,058 million, plus certain potential contingent payments. The base consideration will be allocated 50 per cent to plant and machinery for tax purposes and has an effective date of 1 January 2012 (except in respect of Devenick). The transaction is being funded from existing operating cash flow and credit lines.

The acquisition is subject the satisfaction of pre-emption rights as well as government and certain third party approvals. It is expected to complete in Q2 2013.

Evercore Partners acted as financial adviser to TAQA in relation to this transaction.

WAM/MN

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