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UPDATE 1-EnQuest quits Tunisia after oil field deal stalls
February 2, 2015 / 9:42 AM / 3 years ago

UPDATE 1-EnQuest quits Tunisia after oil field deal stalls

(Adds PA Resources statement, background, details, share prices)

LONDON, Feb 2 (Reuters) - North-Sea focused oil producer EnQuest has pulled out of Tunisia after a deal to purchase an oil field stake failed to go through, forcing it to reduce its 2014 production figure by just over 1 percent.

EnQuest’s involvement in Tunisia was small. In 2013 it signed an agreement with Stockholm-listed PA Resources to purchase a 70 percent stake in the Didon producing oil field and the Zarat oil exploration permit.

The company had placed $23 million in an escrow account to pay for the transaction, pending an approval letter from Tunisian authorities.

“Despite repeated verbal assurances from the Tunisian authorities that such a letter was imminent, none has yet been issued,” PA Resources said on Monday.

EnQuest said the money had been returned and it was reducing its 2014 production figure by 372 barrels of oil equivalent per day (boepd) to 28,267 barrels to account for the missing production from Didon.

“This news has a very small positive valuation impact we believe, eliminating $14 million for our core asset value but the company benefitting -- particularly important at this time -- with $23m returned cash,” said analysts at Canaccord Genuity, who have a “hold” rating on EnQuest’s stock.

Shares in EnQuest were up 2.9 percent at 0923 GMT, while PA Resources was trading 5.7 percent lower.

PA Resources said it was looking at options for its Didon field, including shutting the field until oil prices recover. (Reporting by Karolin Schaps; Additional reporting by Helena Soderpalm in Stockholm; Editing by Jason Neely and Mark Potter)

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