Midcap oil and gas exploration company EnQuest is in talks with Israel's Delek Group to farm out a 20% interest in the North Sea's Kraken oilfield development, as it explores ways reduce its debt in the wake of the oil price slump.

Confirming the move on Monday (18 July), EnQuest said Delek would advance $20m (£15.1m) to it for a period of five years, at an annual interest rate of 3%.

Delek would also bear its share in the project capital expenditure back-dated to 1 January 2016.

Additionally, the advanced amount would be returned to Delek in the event that its costs are not covered by revenue, within five years from the completion date.

EnQuest raised its interest in Kraken to 70.5% earlier this year after buying out First Oil Expro's stake in the field. The company expects to spend another $90m before the oilfield comes onstream commercially over 2017.

First Oil Expro called in administrators on 22 February, unable to cope with a 36% decline in Brent oil prices noted in 2015.

In doing so, it became the first UK oil and gas producer with exposure to the North Sea to go into administration since oil price slump began in July 2014, with crude currently lurking below $50 per barrel, more than halving from $115 per barrel back then.