Strategy & Business Development

Background

The Norwegian Continental Shelf (NCS) is a maturing petroleum province, yet activity levels are still high and the shelf continues to be attractive to a large number of players present. These players vary strongly from each other - from Statoil and majors to small exploration-focused companies, having specific strategies and pursuing different opportunities, for example exploration only or tail-end production. As these companies optimize their portfolio according to their strategies, acquisition candidates become available. Rystad Energy has extensive experience in helping companies in screening for acquisition targets.

Approach

Rystad Energy’s proprietary database UCube includes production profiles for all fields and discoveries worldwide and estimated yet-to-find resources. When screening for acquisition targets or farm-in candidates, UCube, public sources, and our industry knowledge are utilized to identify a long list of potential companies, fields, discoveries or licenses based on client needs (e.g. exploration companies with large future capital expenditure commitments, discoveries with mainly oil reserves, exploration licenses with future drilling planned, etc.). Acquisition targets are thoroughly researched by Rystad Energy before a discussion with the client commences. A short list of opportunities is then prepared, which the client can pursue.

Result

The result is a detailed evaluation of opportunities and the impact each of them has on the client’s portfolio, especially when it comes to production, reserves, and cash flows. A sample illustration of this is shown to the right.

Transaction Opportunities with Possible Impact on Cash Flow and Production
Background

The portfolio of producing assets on the Norwegian Continental Shelf (NCS) is dominated by mature fields entering tail production. As this represents a new phase for many operators and partners, the development of a strategy for such fields causes the need for new thinking and approaches. In our project example, the licensees needed assistance with the process of updating the asset strategy for the field. Rystad Energy was in a good position to assist the license group due to our in-depth knowledge and understanding of the NCS but also because of our specific insight into individual field opportunities and challenges through our continuously updated research products (NCS Business Development Atlas) and databases (UCube).

Approach

Rystad Energy supported the license group by reviewing existing plans and conducting in-depth individual interviews with key people from the licensees to understand their views on the situation and opportunities for the field. Prior to the interviews, Rystad Energy prepared a key value driver analysis to understand how value is created for the field, including cost improvements/curtailment, reserves growth, production acceleration/uptime, third-party tariffs, and deferred abandonment. After the interviews the key value driver analysis was finalized and core findings documented, including a long list of opportunities for further discussion and prioritization by the partnership.

Result

The final delivery included Rystad Energy preparing and facilitating the discussion of the strategy module in the license meeting, where specific tasks and targets for the field were agreed upon.

Mature Field Production, Economics and Drilling Activity
Background

The business development and exploration teams within oil and gas companies often work together in identifying potential farm-in candidates to inorganically acquire future exploration opportunities. However, with geologists heavily concerned with geological data and business developers/analysts concerned with the transaction landscape, there could be a challenge in finding proper overviews and tools that facilitate discussion between these teams. Rystad Energy was given the task to facilitate such a workshop, preparing the relevant material.

Approach

The Rystad Energy team systematized all historically drilled exploration wells in the area of interest and classified the exploration targets with the targeted geological age (play). By leveraging already established databases of resources found, the team created exploration creaming curves for the individual geological plays. In short, a creaming curve shows aggregated resources found as a function of number of wells drilled; hence, steeper curves indicate more prolific and attractive plays.

Result

A comprehensive report outlining the historical and recent development within resource additions from individual plays within the selected area was established. Bringing the report of creaming curves to the client workshop, Rystad Energy managed to facilitate an efficient process with the business development and exploration teams. The client teams found a common ground on which to assess peers exploration positions and efficiently reached a consensus long-list of farm-in opportunities.

Norwegian Side - North Sea