North Sea sale boosts Clyde

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The Independent Online

Clyde Petroleum is aiming to reduce debts by the pounds 48m sale of more than a third of its 35 per cent stake in three North Sea blocks, including the Gryphon Field, which has been producing oil for the past 20 months. Shares in Clyde firmed 1p to 42p on the announcement.

Total gross production from Gryphon over that period has reached 21 million barrels of oil. Daily output stands at 40,000 barrels.

The sale is in two parts. Cairn Energy is buying a 10 per cent stake in blocks 9/18a, 9/18b and 9/18c and Gryphon from Clyde for pounds 35.75m in cash. Talks are being held to sell a 3.5 per cent stake in the blocks and Gryphon to an unnamed third party for pounds 12.25m.

Clyde will retain a 21.5 per cent interest in Gryphon, much the same as it had before increasing its stake in 1990, when the field was at the early stages of development.

"We have decided to sell part of our interest in order to restore the balance of assets within the group," said Roy Franklin, managing director of Clyde.

The cash will reduce debts, which amounted to pounds 145m at the end of last month. If both deals are concluded, Clyde's interest in Gryphon will contribute 20 per cent to total production.

Wytch Farm in Dorset also contributes 20 per cent of production, and Clyde's gas production from 36 fields in the Netherlands accounts for a further 40 per cent.

Cairn plans to fund almost half of its pounds 35.75m outlay through a pounds 16.9m rights issue. The cash call is on the basis of one for three at 80p per share, compared with a closing price yesterday of 89p, down 0.5p.

Bill Gammell, chief executive of Cairn, said: "The cash flow provided by the acquisition will enhance the development of our existing business, including our exploration and appraisal programme in Bangladesh."