E.ON has said no comments will be made on its potential exit from the North Sea until the conclusion of its ongoing strategic review.
Reports over the weekend suggested the German energy giant has instructed Bank of America Merrill Lynch to find buyers for its UK exploration and production (E&P) interests, which could boost the company’s books by £1billion if sold.
More than £6billion of North Sea assets are already on the market, with oil and gas consultancy group 1 Derrick claiming all of the major groups in the region – including Total, Shell and BP – are also looking to make an exit due to low oil prices.
E.ON E&P operates a number of production interests, including the Elgin, Franklin, Glenelg, West Franklin, Scoter and Merganser fields in the central North Sea.
It also has Southern North Sea assets in the form of the Babbage, Johnston, Hunter and Rita producing fields. Additionally, it has interests in the third-party operated Caister, Minke and Ravenspurn North fields, as well as the ETS and CMS pipeline systems.
Potential buyers for E.ON’s assets, which may be sold either as a package or piece-by-piece, include North Sea explorer Siccar Point Energy. In September 2014, the company launched with a $500million investment from Blue Water Energy and Blackstone Energy Partners in order to fund gas exploration, development and production in the UK Continental Shelf.
The reported exit from the North Sea for E.ON comes months after it unveiled a new corporate strategy last year. In November 2014, the firm announced it was to re-focus its efforts on renewables, distribution networks and customer solutions.
At the time, E.ON SE CEO Johannes Teyssen said: “We are convinced that it’s necessary to respond to dramatically altered global energy markets, technical innovation, and more diverse customer expectations with a bold new beginning.
“E.ON’s existing broad business model can no longer properly address these new challenges. Therefore, we want to set up our business significantly different. E.ON will tap the growth potential created by the transformation of the energy world.”