Verus Petroleum Up For Sale

Private equity firm HitecVision is seeking to sell its British North Sea oil and gas production unit Verus Petroleum, which last year completed a string of large acquisitions ramping up its output, industry and banking sources said.

The sale process is being run by investment bank Jefferies and could fetch $500 million, according to the sources.

HitecVision and Verus Petroleum did not respond to requests for comment. A Jefferies spokeswoman declined to comment.

Aberdeen-based Verus Petroleum outlined last November plans to move to "a new phase of growth" after its oil and gas production rose 12 fold to 18,000 barrels of oil equivalent per day (boed) following three key acquisitions.

Verus Petroleum last year bought Cieco, the North Sea subsidiary of Japanese commodity trading house Itochu (ITOCY) for $400 million. It also bought Premier Oil (PMOIF)'s interest in the Babbage gas field and Equinor's stake in the Alba field.

The deals were funded by equity provided by HitecVision, cash and debt.

Verus Petroleum's production averaged 15,500 boed in 2018 at an average cost of $11 a barrel, according to its website.

The North Sea has seen a slew of investments in recent years as long-standing oil companies such as Royal Dutch Shell (RYDAF) and BP reduce their presence in the ageing basin while new, often private equity-backed firms see opportunities to squeeze profits from fields in the region through more nimble operations.

Verus Petroleum's sale process comes as a number of companies are also trying to sell assets in the basin including Chevron (CVX), France's Total and ConocoPhillips (COP).

(Reporting by Ron Bousso Editing by Alexandra Hudson)