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MOL lauds North Sea grab

Company pays $130 million in era of regional risk.

By Daniel J. Graeber

BUDAPEST, Hungary, Dec. 22 (UPI) -- Hungarian energy company MOL said Monday its latest acquisition of licenses in the British waters of the North Sea gives it a good position in a low-risk area.

MOL said it closed on a deal with Premier Oil U.K. Ltd. to acquire six licenses in the central North Sea.

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"This transaction extends the presence of MOL Group on the global map of offshore exploration and production in a stable lower risk area," Alexander Dodds, a vice president in charge of exploration and production, said in a statement. "Moreover, together with MOL Group's already existing assets in the UK North Sea, this transaction will combine to create considerable operational synergies."

The company said it expected the license areas in the North Sea could hold prospective, unrisked reserves of 7 million barrels of oil equivalent. The $130 million deal was first announced in July.

The close of the deal with Premier comes as oil production from the North Sea is in a steady rate of decline. Production fell 7 percent from last year, though the rate of decline is slowing.

Last week, Robin Allen, chairman of the independent British exploration association Brindex, told the BBC that, with oil prices trading about 45 percent less than they were in June, the industry was "close to collapse."

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Year-to-date, the assets acquired by MOL have averaged 3.7 million barrels of oil equivalent per day, with peak production of 6.2 million boe anticipated within the next two years.

Shares of the company opened down 1 percent from the previous sessions to trade at $44.29 on the Hungarian exchange.

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