ExxonMobil in Norway Sale to Point Resources
Wednesday 29 March 2017
ExxonMobil is exiting its operated upstream position in Norway following a deal with private equity-backed player Point Resources.
The deal, which has recently been rumoured to be on the cards, will see HitecVision-backed Point join the list of large independents operating on the Norwegian continental shelf.
Apart from producing assets, Point is getting five platforms/floating production, storage and offloading units, an office building near Stavanger and the majority of the US supermajor's E&P staff in Norway - both onshore and offshore.
The operated interests being acquired are: Balder, Ringhorne, the partially-developed Forseti field (all 100%), Ringhorne Ost (77%) and the Jotun unit (60%), where production ceased last year. Point is also getting the Jotun floater and the office at Sandnes.
No deal value was disclosed, with a HitecVision spokesman saying this has been mutually agreed between the parties. Recent reports, which have pointed to a likely deal, have put the value at a possible $1 billion.
Bloomberg had recently reported that Point was joined by Aker BP and private equity player Neptune Oil & Gas in chasing the ExxonMobil operated upstream assets in Norway. However, in late February Norwegian news site Petro.no reported that ExxonMobil was negotiating mainly with Point over the sale, based on information from industry sources.
The buyers said that "no redundancies are expected within the combined company as a result of the transaction". This is due to the "number of development plans and opportunities" on the NCS.
The 300 or so onhsore and offshore ExxonMobil employees will move over to Point, which will then have around 350 staff - "a number that is expected to grow over the coming years," the buyers said.
The acquired assets had average production last year of around 54,000 barrels of oil equivalent per day, to add to Point's 6000 boepd.
"With an asset portfolio that includes several fields in the development phase, the combined company has the potential to grow its production base organically to over 80,000 boepd by 2022, and will have reserves and contingent resources of about 350 million barrels of oil equivalent," HitecVision and Point said.
Point will plough funds into maximising output and extending the life of the acquired assets, having already "identified a significant number of infill drilling targets within the Balder, Ringhorne and Ringhorne Ost fields".
The company plans to drill more than 10 wells over the next five years to boost production.
"There are also plans for further development of the Forseti field," the new owners said.
"In addition, a number of potentially material exploration prospects have been identified in the licences around the fields. These will be matured for drilling and may provide additional resources that can be tied back through the existing infrastructure."
Point was formed just last year through the merger of Core Energy, Spike Exploration and Pure Exploration (formerly Rocksource). Point presently holds partner stakes in three producing fields - Snorre, Brage and Boyla - as well as significant discoveries including Pil & Bue, Bauge, Brasse and Garantiana.
The company plans to invest more than Nkr20 billion ($2.34 billion) on the NCS in the next five years.