Irish exploration firm United Oil and Gas agrees asset sale as part of North Sea exit strategy

United Oil and Gas chief executive Brian Larkin.

Irish exploration company United Oil and Gas has agreed the sale of its North Sea licences, which will see it exit the region and pump more resources into its core assets in Egypt and the Mediterranean.

United is selling its two central North Sea UK licences for up to £3.2m (€3.8m) to newly-founded UK explorer Quattro Energy. An initial payment of £2m has been agreed, and the overall deal is expected to complete by the end of September.

In a trading update, earlier this week, United said it should show revenues of up to $10.5m (€8.9m) for the first half of this year. It added that it has cleared further hurdles towards reaching first gas production in Italy and is progressing its farm-out programme regarding its assets in Jamaica.

A marked reduction of the Irish company's UK assets has been planned for some time.

"With this transaction, we continue to demonstrate our ability to actively manage our portfolio of assets to unlock significant return in value for our shareholders in a short period of time," said United CEO Brian Larkin. 

In line with our stated strategy, the proceeds of this transaction will further strengthen our balance sheet to support the growth of the company."

The sale of the North Sea licences is subject to the completion of due diligence and approval from the UK’s Oil and Gas Authority.

Earlier this year, Mr Larkin said United’s long-term geographical focus will be on northern Africa and the Caribbean.

He added that there remains a lot of room for organic growth to be generated from the company’s assets in Egypt, currently United’s prime revenue generator.