Deepsea Yantai, rig used for Dugong drilling; Source: Odfjell Drilling Neptune

Neptune Energy increases stake in Dugong discovery

Oil and gas exploration firm Neptune Energy has signed an agreement with Concedo for the acquisition of a further five per cent interest in the Dugong license in the Norwegian sector of the North Sea.

Deepsea Yantai, rig used for Dugong drilling; Source: Odfjell Drilling

Neptune said on Thursday that it would have a 45 per cent interest in Dugong – production license 882 – upon completion of the acquisition.

According to the company, the payment will be partly cash, partly carry of future cost, and partly a contingent payment.

The Neptune-operated Dugong discovery is dubbed as the largest on the Norwegian Continental Shelf so far this year. Volumes are estimated to be in the range of 40-120 million barrels of oil equivalent (boe). Prospective resources for the Tail prospect are currently estimated at 33 million boe.

Neptune and its license partners plan to drill two additional wells on the Dugong license, an appraisal well on the Dugong discovery, and an exploration well targeting the Tail prospect. Drilling will start in the first quarter of 2021.

Dugong is located 158 kilometres west of Florø, Norway, at a water depth of 330 metres, and is close to existing production facilities.

Neptune added that the transaction was subject to approval by the Norwegian Ministry of Petroleum and Energy.

On completion of the transaction, the Dugong partners will be Neptune Energy as the operator and a 45 per cent stake, Concedo will have 15 per cent, Petrolia NOCO and Idemitsu Petroleum will hold 20 per cent each.

It is worth reminding that Neptune Energy hit hydrocarbons at the Dugong well in early July 2020. The well was drilled by the Deepsea Yantai semi-submersible rig owned by CIMC and operated by Odfjell Drilling. The well will be plugged and abandoned.