Enterprise venture dismantled

The five-year-old joint venture between Elf Aquitaine and Enterprise Oil has sold its 13 per cent stake in Enterprise for about pounds 230m and will now be dismantled.

Enterprise, which said the move would benefit the company and its shareholders, will make a pounds 25m charge this year related to the change. The shares were widely placed at around pounds 3.70, compared with the pounds 4.77 value in the oil company's books.

The joint venture was formed in 1991 as a vehicle for the takeover of the North Sea assets of Occidental Petroleum, which included fields such as Piper, Claymore and Saltire. At the time, Elf injected its shareholding in Enterprise into the venture while Enterprise donated its Nelson field. The French group owned two-thirds of Elf Enterprise and in effect had operational control.

The reorganisation gives the two groups direct control of their assets and is also thought to be driven by Elf's desire to reduce debt. Graham Hearne, chairman of Enterprise, said that in spite of the move he hopes to strengthen the exploration and production relationship between the two companies.

Enterprise will receive pounds 219m in oil and gas assets as a result of the demerger and debt and other liabilities of pounds 130m. The assets transferred from the joint company are cash-generative and the re-organisation is expected to marginally enhance Enterprisel's earnings per share from 1996 onwards.

The announcement came as Total of France reported a fall in net profit to Fr2.2bn from Fr3.4bn the previous year. The decline was due to a one- off Fr1.5bn charge for restructuring and accounting changes and Total predicted "a substantial growth in profits" in similar trading conditions this year.