However, the best practice in the U.K. North Sea is for the partners in any asset to enter into a decommissioning security agreement. These disagreements, if you're not familiar with them, required the partners to provide decommissioning security. The amount, the type of security determined is through a complex formula, unique to every field and correlated to each company's credit quality.
In our case and in Alba, we issued a cash collateralized letter of credit from a major international bank, and we pay a fee to investors who cash collateralized that LC. This transaction is simple in concept, but it was very difficult in execution, as you know. It took us right to the last minute that get that deal done. But we were able, as a team to get the deal done. That was through a fair amount of perseverance, appropriate financial structuring for the company and the transaction that we were looking at, and, I think, most importantly, a strong belief that the Alba transaction was worth the effort that we had to go through to get it done.
We also believe that the nominal value of that letter of credit that we put in place will be significantly reduced next year as the U.K. Treasury implements the already announced certainty around decommissioning tax deductibility.
As to MacCulloch and Nicol, as you we might remember, the ConocoPhillips asset acquisition was in 2 phases. The first phase was to get the Alba transaction done, which we accomplished and I just talked about. The second phase was MacCulloch and Nicol. Once we got the Alba transaction done right at the end of May, we focused all of our attention on the second phase of the asset purchase from ConocoPhillips. The process involves for us to transfer operatorship from Conoco to Endeavor. It also requires us to come to an understanding with the other partners on the decommissioning security, should it be required, but not, in our opinion, a field-wide DSA as we executed on the Alba transaction.Read the rest of this transcript for free on seekingalpha.com
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