Buzzard oil & gas field in the UK North Sea

Australian player enters North Sea acreage close to UK’s giant oil field

Australia-based Finder Energy has expanded its UK North Sea portfolio after entering into an agreement with Talon Energy to acquire a 100 per cent interest in Seaward Production Licence P2527, which is close to the UK’s giant oil field, the Buzzard.

Buzzard oil & gas field in the UK North Sea; Source: CNOOC Petroleum Europe

P2527 is located in the Outer Moray Firth and covers an area of 110 square kilometres approximately 100km ENE of Aberdeen in water depths of around 100m. The licence contains the White Bear prospect, is located next to the giant Buzzard field (1.5 billion barrels), and is proximate to Finder’s P2528 licence in the Central North Sea.

Announcing the agreement on Tuesday, Finder said it is conditional upon obtaining the usual regulatory approvals.

Finder Energy pointed out that the Buzzard field, which was discovered in 2001, is the most significant oil discovery in the North Sea in the modern era and the UK’s highest-producing oil field (peak production exceeded 200,000 bopd) with the reservoir consisting of Upper Jurassic deep marine turbidites within the Kimmeridge Clay Formation.

It is worth reminding that CNOOC Petroleum, the operator of the Buzzard field, last December started production from the Buzzard Phase II development, which was an expansion of the existing development.

Furthermore, a project is in the works which could see the Buzzard field electrified with power from a floating offshore wind farm, enabling the reduction of carbon emissions from the oil and gas production in line with the UK’s net-zero goals.

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Finder CEO, Damon Neaves, said: “Finder’s prospects are attractive to operators of nearby infrastructure because they open up the potential for low cost and rapid tie-backs to achieve early production by utilising capacity in their existing infrastructure. These factors greatly improve the farm-out potential of Finder’s prospects, which is the central pillar of Finder’s infrastructure-led exploration strategy.”

P2527 was awarded in the last bid round – the 32nd Offshore Licensing Round – and is currently in Phase A, which is a period of four years expiring on 30 November 2024. The work programme for Phase A is limited to licensing and reprocessing of 3D seismic data and technical studies. Finder has licensed 3D data over P2527 and is nearing completion of the Big Buzz 3D Full Wave Form Inversion (FWI) Pre-stack Depth Migrated (PSDM) Reprocessing Project over an area of 1,667 square kilometres as part of its work programme on P2528.

Map of Central North Sea showing location of P2527 Licence and Finder’s surrounding acreage
Map of Central North Sea showing location of P2527 Licence and Finder’s surrounding acreage

The P2527 licence falls within the area of the Big Buzz 3D reprocessing project. Accordingly, the Phase A work programme for P2527 is satisfied by the Big Buzz reprocessing project and technical evaluation and Finder is not required to make any material additional spend to meet the current phase work commitment on the licence.

Following completion of the Big Buzz reprocessing project, prospect evaluation will begin in June which is expected to generate risking and resource estimates on key prospects. As explained by Finder, this work will kick off farm-out efforts later this year to attract partners to fund drilling activity.

Under the terms of the acquisition, Finder will acquire a 100 per cent interest in P2527 in return for granting Talon a right to 12.5 per cent of gross income received by Finder in relation to P2527 (for example, any cash received for farm-out or divestment) which converts to a royalty of 3 per cent of Finder’s retained net share of produced petroleum during the production phase.

Commenting further, Neaves said: “Western European nations, and the United Kingdom in particular, are in great need of new oil and gas reserves due to regional conflict and sanctions on Russia. Energy companies are heeding this call and very favourable conditions are emerging for farm-out and drilling activity in the North Sea.”

Neaves added: “Finder has timed its entry into the North Sea perfectly and this highly complementary acquisition increases our leverage to this basin on compelling terms. We look forward to demonstrating the value of this acreage through farm-out deals and, ultimately, discoveries that will bring new oil reserves into production for Finder and the United Kingdom.”