British oilfield services provider Petrofac Ltd. said Aug. 24 it agreed to sell its 20% interest in the Greater Stella Area of the North Sea to oil and gas operator Ithaca Energy Inc. in a deal worth up to $292 million.

Petrofac, which designs, builds, operates and maintains oil and gas facilities, expanded into oil and gas production during the oil price boom earlier this decade.

But the strategy didn't last and Petrofac has since been scaling back oil and gas production.

It announced the sale of its oil fields in Mexico last month after a warning last year that its integrated energy services division would have lower than expected profits.

"This disposal marks a further milestone in our journey back to a capital-light business... [divestiture] marks the significant progress we are making on our stated strategy," CEO Ayman Asfari said in a statement.

The proceeds from the sale of the North Sea assets, which also include a 24.8% interest in the FPF1 floating production facility, will be used to cut debt.

Petrofac expects to take a post-tax impairment charge of roughly $55 million from the sale.

Ithaca will pay roughly $145 million on completion of the deal, $120 million in non-contingent deferred consideration between 2020-2023 and a further $28 million of contingent consideration is payable depending on field performance, Petrofac said.

Reuters reported in May that Ithaca, owned by Israel-based Delek Group Ltd., would consider making an offer for the Petrofac holdings given its existing interest in the Greater Stella Area.

Ithaca also announced on Aug. 24 the acquisition of all of Dyas UK Ltd.'s interest in the Greater Stella Area plus the FPF-1 floating production facility, giving the company full ownership of the assets.

Offshore