Tellus Petroleum Acquires Working Interests

Source Press Release
Company Tellus Petroleum ASWintershall Dea GmbH 
Tags Asset Deals, Deals, Pipelines/ tankers/ distribution, Upstream Activities
Date June 18, 2015

Tellus Petroleum acquires working interests in the Knarr, Maria, Ivar Aasen and Veslefrikk fields in a large upstream portfolio transaction with Wintershall Norge AS and concurrently becomes part of the Sequa Petroleum Group. 

 Tellus Petroleum is pleased to announce that the company has entered into an agreement with Wintershall Norge to purchase 20 % interests in the Knarr field, 15 % in Maria, 6.5 % in Ivar Aasen and 4.5 % in Veslefrikk in a large asset portfolio transaction on the Norwegian Continental Shelf (“NCS”) from Wintershall Norge AS. Included in the transaction is also 10 % in PL 316 which contains Yme and interests in seven additional exploration licenses. The asset portfolio transaction is subject to normal consent by Norwegian Authorities, including the approval of  Tellus Petroleum as a new NCS player.

  • The proven and probable (2P) reserves in the transaction is some 59 mill. boe net to Tellus based on the official Norwegian Petroleum Department (“NPD”) website numbers and the production peak is expected in the order of 15,000 boe net per day, predominantly oil. The purchase price is US$ 602 million, which makes it one of the major acquisitions on the NCS so far this year.  In addition, Tellus Petroleum will make a further payment of up to US$100 million depending on the development of the oil price in the period from 2016 to 2019. The effective date of the transaction is 1st January 2015.
  • Tellus is further pleased to announce that concurrently with the Wintershall transaction, Tellus is becoming a subsidiary of Sequa Petroleum N.V. The current owners/management of Tellus will be compensated by cash/Sequa shares and will continue to run the company. The Tellus organisation in Norway will be further supplemented to manage the portfolio.

This is a transaction comprising a complete E&P portfolio for Tellus Petroleum, and provides us with an excellent platform for continued growth on the NCS. The package is aligned with the Tellus and Sequa strategic goal to acquire oil and gas assets that are in production or are being rapidly developed towards production. Tellus looks forward to co-operating with Wintershall and the other operators/partners as well as the authorities and the oil service companies to work the assets to their full potential. We are further excited for Tellus to become a part of the Sequa Petroleum Group, says Fridtjof Jebsen, CEO of Tellus Petroleum.

About the Companies:

Tellus Petroleum AS  was established in 2012 by a group of entrepreneurs with background from  Saga Petroleum,  Phillips Petroleum, Norsk Hydro, Hess and PetroAdvisor as an independent Norwegian upstream oil & gas company with sole focus on the NCS. The aim is to establish and further enhance the value of a portfolio of interests in producing fields and small to medium sized discoveries/developments.  Tellus will work the assets technically and commercially together with the authorities, operators, partners and suppliers to mature discoveries into production, including time critical satellite tie-backs to existing infrastructure and contribute to improved area solutions.

Sequa Petroleum N.V. is an oil and gas company listed on Euronext Marché Libre which focuses on taking discovered oil and gas reserves and resources from appraisal through to production. Sequa Petroleum has assembled a highly experienced management team with a proven track record and expertise in exploration, appraisal, development and production of oil and gas assets, both onshore and offshore, in jurisdictions around the globe. Sequa Petroleum is supported by a strong and dedicated shareholder base which includes its entire senior management team as well as the privately owned Principal Investment holding company Sapinda Holding BV. Sequa Petroleum pursues mid-sized discoveries that have not yet been developed for a number of reasons, e.g. commercialisation approach, technology application or lack of capital and Sequa aim to unlock opportunities and realise their potential value..

Wintershall Holding GmbH, based inKassel,Germany, is a wholly-owned subsidiary of BASF inLudwigshafen. The company has been active in the extraction of natural resources for 120 years, and in the exploration and production of crude oil and natural gas for over 80 years. Wintershall focuses on selected core regions where the company has built up a high level of regional and technological expertise. These are Europe,Russia, North Africa, South America, and increasingly theMiddle East region. The company wants to expand its business further with exploration and production, selected partnerships, innovation and technological competence. Wintershall employs some 2,500 staff worldwide from 40 nations and is nowGermany’s largest, internationally active crude oil and natural gas producer.

Information on the fields in the transaction

Knarr (20 %)

The Knarr oil and gas field is located in theNorth Tampenarea, 40km north of the Snorre field with the initial discovery in 2008 and Knarr West in 2011. The field is operated by BG Group (45 %) and partners are  Idemitsu (25 %), Wintershall (20 %) and Dea (10 %). The field is developed by subsea templates tied-in to the Petrojarl Knarr FPSO leased from Teekay and started production in March 2015. The FPSO has a production capacity of 63,000 bbl of oil per day, and the water depth is 400 m. The oil and gas is being produced from lower Jurassic sandstones in the Cook formation at some 3,800 m. The proven and probable reserves in Knarr is 83 mill. boe according to the NPD website. Ownership interest in the Knarr Gas Pipeline (20 %) is included in the transaction.

Maria (15 %)

The Maria field is located in the Haltenbanken area of the Norwegian Sea. Wintershall is the Operator of the field and will retain the largest interests (35%) and operatorship post transaction. The other partner are Petoro (30 %) and Centrica (20 %). The Plan for Development and Operation (PDO) was submitted to the Ministry of Petroleum of Energy 5th May 2015. The Maria development solution is a subsea tie-back to the Kristin platform with two templates, two producers and one injector on each template with injection water from Heidrun and gas lift from Åsgard via Tyrihans. Oil will be exported via existing pipeline from Kristin to Åsgard C storage ship where it is blended and offloaded to shuttle tankers. Rich is gas exported via Gassled to Kårstø and further as dry gas to the European market. Capex is estimated at NOK 15.3 bn and production is planned to commence 1st October 2018. Peak production is expected to 41,000 boe per day and gross proven and probable reserves is 190 mill. boe according to NPD.

Ivar Aasen (6.5 %)

The Ivar Aasen oil field is located in the northern part of the North Sea, northwest of the Johan Sverdrup field. The partners are Det norske (operator 34.8%), Statoil (41.5 %), Bayerngas (12.3 %), Wintershall (6.5 %), VNG Norge (3.0 %), Lundin (1.4%) and OMV (0.6 %). Production is planned to commence in October 2016 and Ivar Aasen will be developed with a 4 legged Steel Jacket platform and topside facilities include 1ststage separation, produced water treatment, water injection system, living quarter, and utility and safety systems. Power and gas lift will be provided by the neighbouring Lundin operated Edvard Grieg platform. A total of 7 producers and 6 injectors (all platform wells) are planned and oil and gas will be exported to the Edvard Grieg platform via pipeline and further onwards to the Grane Oil Pipeline (to the Sture terminal) and gas via the SAGE system to the UK. Peak production is estimated at 65,000 boe per day and gross reserves are 189 million boe according to NPD. Ownership interests in the Utsira High Gas Pipeline (3.8769 %) and the Edvard Grieg Oil Pipeline (2.5846 %) is included in the transaction.

Veslefrikk (4.5 %)

The Veslefrikk oil and gas field is located in the northern part of the North Sea, about 30km north of Oseberg and was discovered in 1981 in the Jurassic Veslefrikk reservoir at depths of 2,800-3,200m. The field is developed with two facilities that are bridge-linked, Veslefrikk A that is a steel jacket wellhead and drilling platform and Veslefrikk B a semi-submersible living quarter and processing platform.  The field commenced production in 1989. The field is on the tail-end and has started gas blow down. Partners are Statoil (operator, 18.0 %), Petoro (37.0 %), Talisman (27.0 %), Dea (13.5%) and Wintershall (4.5 %). Remaining reserves are 34 million boe according to NPD.

Exploration licenses

  • 10 % in PL 611 with an exploration well on the Kvalross prospect planned to be drilled in the Barents Sea in 2015
  • 40 % equity in PL 457 in the Ivar Aasen area
  • Working interests in five production licenses in the Maria area; PL475 (10 %), PL 475D (10 %), PL 590 (5 %), PL 590B (5 %), and PL 638 (16 %).
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