RYSTAD ENERGY PRODUCT HIGHLIGHTS • NCSAtlas: provides monthly up-to-date information on licenses and field activities on the Norwegian Continental Shelf, including area-by-area reviews, exploration drilling activity, reserves/resources benchmarks, production profile outlooks and monthly feature topics (e.g. asset transaction).
NCSAtlas Insights December 2014 • Break-even analysis of NCS versus NAm shale liquids • Reduced Q3 investments globally for E&P companies • Exploration sensitivity to oil price
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Key NCS Takeaways December 2014
Oil price has continued to drop during November, also as a result of Nov 27 meeting where OPEC decided not to reduce production. Brent oil price is down from 83 USD/bbl Nov 5 to 68 USD/bbl Dec 8. US shale plays to be profitable on WTI price above 65 USD/bbl. In particular Eagle Ford, Niobrabra and Bakken with low breakeven prices. See Rystad Energy press releases for more information
As oil price drops more offshore projects become at risk. Rystad Energy calculations for NCS projects (non-sanctioned) shows average breakeven of 74 USD/boe. However, a large project such as Johan Sverdrup has breakeven lower than 45 USD/bbl
The partners at Snorre have decided to postpone DG2 decision for Snorre 2040 from March 2015 to October 2015. No change to final investment decision (DG3, Q4 2016) and production start-up (DG4, Q4 2021). A new platform is planned, Snorre C, with capex NOK 30 billion and 250 mmboe resources (17 USD/boe). Breakeven of Snorre 2040 is estimated to ~75 USD/bbl
Johan Sverdrup partners officially recommend Statoil as the operator for all phases of the field. The agreement will be included in the Unit Operating Agreement (UOA), planned to be submitted in February 2015 together with the PDO
NCS investment level expected down in 2015. Rystad Energy forecast (as of Q3 2014) is NOK 216 bn for 2014 and NOK 199 bn for 2015. Statistics Norway (SSB) with revisions Dec 4: From NOK 227 bn to 219 for 2014 and from NOK 185 to NOK 189 for 2015. Minor changes for 2015 exploration estimate, suggesting maintained exploration level, in line with Rystad Energy future well count. The statistics is mainly based on operators’ numbers from beginning of October
Exploration campaign in Aasta Hansteen area with small gas discovery in Ivory prospect (PL528). According to NPD the discovery resource estimate is between 2 and 8 billion standard cubic meters. High expectations for Snefrid North prospect to be drilled in Aasta Hansteen license early 2015. Partners in PL528 are Centrica 40% (operator), Statoil 25%, Wintershall 10%, Rocksource 10%, Atlantic 9%, Repsol 6%
Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy advisory and research products for E&P and oil service companies, investors and governments. We are headquartered in Oslo, Norway, with additional research teams in India. Further presence has been established in the UK (London), USA (New York & Houston), Russia (Moscow), for Africa as well as South East Asia.