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 July 2015 • Sequa - Wintershall transaction • First half 2015 summary
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Key NCS Takeaways July 2015
Sequa Petroleum enters the NCS by acquiring Tellus Petroleum and a portfolio package from Wintershall. The package is a combination of exploration licenses, development assets, producing fields and pipelines including Maria (15%), Ivar Aasen (6,5%), Yme (10%), Knarr (20%) and Veslefrikk (4.5%) and the associated pipelines with Utsira High, Edvard Grieg and Knarr. The purchase price is USD 602 million, whereof USD 40 million is subject to Maria PDO approval, price could increase by another USD 100 million depending on the oil price development.
The Ministry of Petroleum and Energy announced its decision on the final Johan Sverdrup unitization after the partners failed to unanimously agree on a split. New shares are (February split in paranthesis): Statoil 40.0267% (40.0267%), Lundin 22.6% (22.12%), Petoro 17.36% (17.84%), Det Norske Oljeselskap 11.5733% (11.8933%) and Maersk Oil 8.44% (8.12%). As such the PL265 share of Johan Sverdrup was weighted down 0.8% by the Ministry compared to the temporary split from February. This represents a value transfer of USD 80 million according to UCube.
CapeOmega entered the NCS by acquiring Noreco's 15% interest in the producing field Oselvar. The consideration was NOK 201 million. Oselvar is a late life field tied back to BP operated Ula with approximately 5 MMboe remaining reserves according to NPD. CapeOmega is a HitecVision backed late-life focused E&P company.
The partners in Yme have decided not to pursue further developments of the troubled project. Planning will commence to remove remaining infrastructure, plug and abandoned wells and relinquish licenses. Current partners in Yme are operator Repsol 60%, Lotos 20%, Kufpec 10% and Sequa 10% (see Wintershall transaction).
Gas discovery in the Gymir prospect in the Aasta Hansteen area (PL602). Resources estimated at 6 to 19 MMboe. This is the third gas discovery along Snefrid Nord and Roald Rygg. Combined resource potential from the three discoveries could be 75-120 MMboe. See this month’s area insight for more details.
Oil and gas discovered in PL 609 Alta II appraisal well on the western flank of the Alta discovery. The main wellbore encountered a gas column of 50 meter in poor to good sand quality and the sidetrack encountered gas and oil in poor to good reservoir quality. The sidetrack was production tested at a rate of 970 boepd. Updated resource estimates of the Alta discovery will be given after the completion of the ongoing Alta III appraisal well and will impact area development potential.
Statistics Norway’s Q2 2015 estimates of the oil and gas investment levels are 190 bn NOK for 2015 and 185 bn NOK for 2016 compared to actual investments of 214 bn NOK in 2014. 2016 exploration spend is estimated to increase 10.7% compared to 2015. However, spend is expected to be reduced as budgets are implemented with lower drilling cost and activity.
Gullfaks Lista/Shetland formation Phase 1 PDO submitted. Phase 1 will only use existing wells with expected recovery of 18 MMboe and investments of NOK 900 million. Phase 2 involving pressure support expected to yield significantly higher recovery factor.
P&A activity may be picking up over the next years as fields are maturing and more rigs are available for this activity. Statoil is planning to P&A 32 wells on Troll and Troll Vest over the period 2015-2017 , 7 wells on Huldra in 2015 and Talisman are doing 8 P&A’s on Varg in 2015.