Iona negotiating farm-out of Orlando in North Sea

Offshore staff

CALGARY, CanadaIona Energy expects cost for the Orlando tieback to the Ninian Central platform in the UK northern North Sea during 2015-2016 to be reduced from $215 million to $192 million.

The company has taken advantage of the favorable contracting environment for 2016 oilfield services to secure savings.

Recently the integrated riser hang off structure was loaded onto a supply vessel, and installation is expected to be completed next month.

Orlando remains on track for first production in 4Q 2016.

Last month, Iona announced a proposed restructuring exercise under which it would farm out of Orlando and the Ronan prospect to an unnamed upstream subsidiary of a global energy company.

The deal involves selling 25% of Orlando for a $25.5-million development cost carry plus cash payments to Iona of $10.8 million after first oil.

In addition, the partner would pay full costs of Ronan/Oran technical studies to earn an option of a 66.67% interest in return for funding full costs of an appraisal well. A drill-or-drop decision is due by the end of this year.



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