Tellus, Wintershall agree to Norwegian license package transfer

Offshore staff

KASSEL, Germany – Wintershall has agreed to sell interests in four fields in the Norwegian North Sea to Tellus Petroleum, the newly acquired subsidiary of Sequa Petroleum.

The interests are Knarr (20%), Veslefrikk (4.5%), Ivar Aasen (6.4615%) and Yme (10%).

Wintershall is also scaling back its share in its operated Maria field development in the Norwegian Sea by 15% to 35%, admitting Tellus as new partner. Recently Wintershall submitted a plan for development and operation (PDO) for Maria.

Additionally, the package includes equity stakes in seven exploration licenses close to Knarr and Ivar Aasen, the Wintershall-operated Maria field development in the Norwegian Sea, and the Barents Sea; and shares in three Norwegian North Sea subsea transportation systems, namely the Utsira High gas pipeline (3.8769%), the Edvard Grieg oil pipeline (2.5846%), and the Knarr gas pipeline (20%).

The transaction price is $602 million, of which $40 million is subject to the Maria PDO securing approval from the Norwegian Ministry of Petroleum and Energy. Tellus will make a further payment of up to $100 million depending on the movement of the oil price during 2016-2019.

Assuming approval from the Norwegian authorities for Tellus to become a new player on the Norwegian continental shelf, the transaction should close by the end of 2015.

Wintershall says despite the sale, its target of raising its oil and gas production to 190 MMboe by 2018 remains unchanged.

Tellus was established in Oslo in 2012 by various Norwegian sector veterans. The company’s aim has been to acquire a portfolio of interests in small and mid-size producing fields and discoveries offshore Norway.

Sequa Petroleum estimates the proven and probable (2P) reserves acquired at 59 MMboe net, based on figures supplied by the Norwegian Petroleum Directorate (NPD), with potential peak production of 15,000 boe/d net, predominantly oil. Sequa will leave Tellus’ current management team to continue running the company.

Knarr came onstream earlier this year and Ivar Aasen is under development. Yme’s platform is due to be decommissioned, although the field itself may be redeveloped.

Veslefrikk is an oil and gas field in the northern Norwegian North Sea, 30 km (18.6 mi) north of Oseberg. It has been developed via two bridge-linked facilities: Veslefrikk A is a steel jacket wellhead and drilling platform and Veslefrikk B a semisubmersible living quarter and processing platform.

Production started in 1989, but the field is now at the tail-end of its life and has started gas blow down. NPD assesses remaining reserves at 34 MMboe.

Among the acquired exploration interests are10 % of license PL 611 in the Barents Sea, where an exploration well is due to be drilled this year on the Kvalross prospect.

06/18/2015

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