Photo: Draugen field; Source: OKEA

Neptune getting rid of non-core assets in Norway

Oil and gas company Neptune Energy has signed sale and purchase agreements with OKEA and M Vest Energy whereby Neptune will divest its non-operated working interests in three producing fields and two export pipelines on the Norwegian Continental Shelf.

The assets Neptune is divesting include the producing Draugen, Brage, and Ivar Aasen fields, as well as the Edvard Grieg Oil Pipeline and the Utsira High Gas Pipeline, located on the NCS. As a result of this transaction, Neptune will no longer hold participating interests in these assets.

OKEA is to acquire a 2.2 per cent interest in the Ivar Aasen Unit. M Vest is to acquire a 0.8 per cent interest in the Ivar Aasen Unit, 7.56 per cent in the Draugen field, 4.4 per cent in the Brage Unit, 1.2 per cent in the Edvard Grieg Oil Pipeline and 1.8 per cent in the Utsira High Gas Pipeline.

Neptune explained that the transaction underpins its corporate strategy to focus its portfolio on core areas. In Norway, these are the Gjøa, Gudrun, Njord, Dugong, and Snøhvit fields. On the other hand, for OKEA, the deal strengthens its position in the Ivar Aasen area and represents a first step towards the realisation of the company’s growth strategy.

The agreed consideration for Neptune totals up to $35 million. All decommissioning liabilities will be transferred to the buyers. The effective date for the agreements is 1 January 2022, subject to Ministry approval. The transactions are subject to customary governmental approvals.

In a separate statement on Friday, M Vest said that the acquisition will add reserves of 7-8 million barrels of oil equivalents with significant upside potential. For 2022 the expected production is 1,700 – 1,800 barrels of oil equivalents per day.

Jonny Hesthammer, M Vest CEO, said: “M Vest Energy is very pleased to announce a transaction that will further transform the company, a journey that started with the acquisition of 5 per cent of the Polarled gas pipeline in 2020. We are now partners in transportation, exploration, field development and production licenses, and are well-positioned for future growth.”