Aker BP completes Valhall and Hod deals

Norwegian oil company Aker BP has completed the acquisition of Hess Norge, which owns stakes in Valhall and Hod fields. Aker BP has also closed the sale of its ten percent interest in those two Norwegian fields to Pandion Energy.

Aker BP entered into a deal to buy Hess Corporation’s oil and gas interests in Norway for total proceeds of $2 billion on October 24.

The transaction included Hess Norge’s interests in the Valhall (64.05 percent) and Hod (62.5 percent) fields located in the Norwegian sector of the North Sea. Aker BP also assumed Hess Norge’s tax positions, which included a tax loss carry forward with a net nominal after–tax value of $1.5 billion, as booked in Hess Norge’s 2016 annual accounts.

The transaction was financed through Aker BP’s new $1.5 billion bank facility and by the issuance of $500 million in new equity. Through this transaction, Aker BP became the sole owner of the Valhall and Hod fields.

However, on December 4 Aker BP made a deal to sell ten percent of the stake in the Valhall and Hod fields to Pandion Energy, thus getting a partner that shared Aker BP’s ambition of developing the upside potential in these fields.

Pandion energy is backed by Kerogen Capital, an independent private equity fund manager specializing in the international energy sector.

Following these transactions, Aker BP now holds 90 percent interest and is the operator of the Valhall and Hod fields.

Valhall & Hod

The Valhall field center consists of six separate steel platforms for living quarters, drilling, production, water injection, and a combined process- and hotel platform.

Two unmanned and remotely operated flank platforms (North and South) are located about 6 km north and south of the field center. The Hod field is developed with an unmanned wellhead platform, located 13 km south of Valhall, and is remotely operated from the Valhall field center.

Aker BP has stated an ambition to produce at least an additional 500 million barrels of oil equivalent. In line with this plan, the company in mid-December submitted the plans for development and operations for three fields to the Norwegian authorities, including the one for the Valhall Flank West.

The Valhall Flank West project aims to continue the development of the Tor formation in Valhall on the western flank of the field, with startup of operation in fourth quarter 2019. Valhall Flank West will be developed from a new Normally Unmanned Installation (NUI), tied back to the Valhall field center for processing and export.

Offshore Energy Today Staff