Ashurst is advising EnQuest plc, the largest independent UK oil producer in the UK North Sea, on its agreement to buy a 25% stake in BP's Magnus oil field. EnQuest will also acquire 25% of BP’s interest in associated pipeline infrastructure in the UK’s northern North Sea and a 3% interest in the Sullom Voe Terminal (SVT) on Shetland from BP Exploration Operating Company Limited.

The US$85 million consideration will be funded by deferred consideration payable from the cash flow from the assets. 

Subject to partner, regulatory and other third party approvals, EnQuest will also take over operatorship of Magnus and SVT on completion.

EnQuest also has the option to buy BP's remaining stake in Magnus and other interests by January 2019 for an additional US$300 million.

Magnus production averaged approximately 17,000 barrels of oil equivalent per day gross during 2016.

The Ashurst team was  led by oil and gas partner Julia Derrick, working with partners Huw Thomas, Nick Williamson and Michael Burns, assisted by associates James Prescott and Harriet Gray. Advice on employment, pensions and incentives issues was provided by partner Marcus Fink, assisted by senior associate Ruth Buchanan and associates Emma James and Liz Ramsaran. Partner Neil Cuninghame advised on antitrust issues, with senior associate Ru-Woei Foong advising on restructuring aspects. Tax advice was provided by partner Nicholas Gardner, assisted by senior associates Tim Gummer and senior associate Mitch Ingham advised on finance matters.

Commenting Julia Derrick said:

"In maturing basins there are a number of factors which can inhibit the transfer of assets to players who can most efficiently maximise economic recovery, particularly so in a low oil price environment. EnQuest used an innovative net cash flow sharing structure and this deal could become a pathfinder for transferring maturing assets from other majors."

Stefan Ricketts, EnQuest's general counsel said:

"This is an innovative transaction structure concerning some important assets. Ashurst brought to bear a number of disciplines and worked tirelessly not only to get us to the point of deal execution but also to assure an excellent foundation to underpin EnQuest's operatorship for the life of the infrastructure."