Faroe completes Blane and Enoch acquisition
- Business & Finance
Faroe Petroleum has completed the previously announced acquisition of interests in the Blane and Enoch fields in the UK North Sea from Roc Oil.
Faroe will now will hold in aggregate a 30.5047% non-operated interest in the Blane and a 13.86% non-operated interest in the Enoch
Initial consideration of $17 million, based on an effective date of 1 January 2015, reduced to $13.7m at completion after working capital and other corporate adjustments, Faroe said.
According to Faroe, the Blane oil field is an established oil field with considerable upside potential to increase production, grow reserves and extend field life, while the Enoch field is currently suspended and is planned to be brought back on stream in Q4 2015.
Graham Stewart, Chief Executive of Faroe Petroleum, said: “Blane is a good quality producing field, well known to the Company and which offers upside potential in the form of increasing reserves, production and field life.”
Blane and Enoch fields
Blane was discovered in 1989, and is located on the Central Graben of the UK continental shelf, extending into the Norwegian sector. Production started in September 2007 from a Tertiary Palaeocene Forties sands reservoir with a structural closure. The oil is of high quality with 420 API. The field has been developed as a sub-sea tie-back to the BP-operated Ula platform located in the Norwegian continental shelf (34 kilometers to the north-east) and currently comprises two horizontal production wells with gas lift and one water injection well. Blane is a low operating cost producing field with upside potential in the existing reserves and the potential for further in-fill drilling. Talisman Energy Norge AS is the operator.
In 2014, gross production from Blane was 4,070 boepd and average operating costs were approximately $17.7/boe. Gross production from Blane in H1 2015 averaged at the lower rate of 2,892 boepd, caused largely by unplanned shut-downs, and the field has been producing at approximately 4,100 boepd since it came back on full production on August 22, 2015.
Furthermore, the Enoch field has been developed as a single well subsea tie-back to the Marathon-operated Brae field. The field was closed in due to a leak at the subsea well-head, which has since been repaired, and the field is currently planned to be brought back on production during H2 2015.
The Talisman North Sea Limited operates the Enoch field, which is currently suspended and is planned to be brought back on stream, pending resolution of certain technical and commercial matters.