Shearman & Sterling advised Oil Search (Alaska) in connection with its exercise of a $450 million option to double its investment in the Nanushuk field in Alaska’s North Slope, while concurrently transacting to align project interests with Repsol E&P USA Inc.
The option acquisition will result in Oil Search owning a 51 percent operated interest in the Pikka Unit and adjacent exploration acreage, and a 75 percent operated interest in the Horseshoe Block and Hue Shale. In 2018, Oil Search had acquired a $400 million operated position in the field from Armstrong Energy and GMT Exploration Company, marking its first foray into the U.S.
Concurrently, Oil Search entered a bilateral acquisition agreement with Repsol to align ownership interests across Oil Search’s and Repsol’s shared Alaska assets. This will result in Oil Search holding a 51 percent interest and Repsol a 49 percent interest across all co-owned leases, for a net payment of $64.3 million from Repsol to Oil Search, with Oil Search retaining operatorship of all lease areas. The companies also agreed upon a structured suite of operating and project agreements to drive better long-term commercial alignment in a contract area estimated to have over 500 million gross barrels of recoverable oil reserves.
The Shearman & Sterling team below also included associate Brianna Lozito.