New operator takes the reins at North Sea field
German oil and gas company Wintershall Dea has completed the sale of its interest in three North Sea fields to Norway’s OKEA. As a result, the Norwegian player has now taken over the operatorship helm at one of these fields.
Back in May 2022, Wintershall Dea reached an agreement with OKEA to sell its stakes in three North Sea fields as part of its strategy to focus on gas production in Norway. The deal entailed the operatorship and a 35.2 per cent share in the Brage oil field along with a 6.46 per cent interest in Ivar Aasen and a 6 per cent stake in the Nova development for $117.5 million (subject to working capital and other adjustments) based on an effective date of 1 January 2022.
In an update on Tuesday, OKEA disclosed that the deal with Wintershall Dea was approved by the Norwegian authorities and “completed according to plan.” The company highlighted that it took over the operator role at the Brage field with effect from 1 November 2022. Aside from adding a new operatorship to its portfolio, the firm explains that it has increased its production and reserves by 30-40 per cent through this acquisition.
Svein J. Liknes, OKEA’s CEO, remarked: “OKEA and Wintershall Dea have had an excellent collaboration in this process. With an overriding focus on safety and business continuity and open and transparent dialogue, the parties have managed to lay the groundwork for a successful transition. We are proud of being able to take over the Brage operatorship, which enhances the scale and diversification of our portfolio and strengthens our position within existing core areas.”
Furthermore, OKEA outlines that the Brage operatorship follows “a highly skilled and experienced organisation” of more than 140 employees, which will be integrated into the Norwegian firm’s organisation while the operations office for this field will remain in Bergen.
Aside from the fixed consideration of $117.5 million, OKEA underlines that it will pay an additional contingent consideration to Wintershall Dea based on an upside-sharing arrangement subject to the oil price level during the period 2022-24. In addition, Wintershall Dea will retain responsibility for 80 per cent of OKEA’s share of total decommissioning costs related to the Brage unit.
Moreover, the Norwegian player’s newly acquired “three high-quality producing assets” in the Norwegian North Sea have expected combined net production of at least 7,000 boepd in 2023 and net 2P reserves of 13.2 mmboe. OKEA also identified “significant upside potential and opportunities” at the Brage field to add value as the new operator. The Brage field started production in 1993; Ivar Aasen in 2016; and the Nova field is under development, with production planned for the second half of 2022.
OKEA’s partners in the Brage field are Lime Petroleum (33.84 per cent), DNO Norge (14.26 per cent), Vår Energi(12.26 per cent) and M Vest Energy (4.44 per cent). When it comes to the Ivar Aasen field, Aker BP is the operator with a 36.17 per cent stake, while other partners include Equinor (41.47 per cent), Spirit Energy Norway (12.32 per cent), M Vest Energy (0.80 per cent) and OKEA (9.23 per cent).
On the other hand, Wintershall Dea Norge is the operator of the Nova field development with a 39 per cent interest and its partners encompass OKEA (6 per cent), Sval Energi (25 per cent), Spirit Energy Norway (20 per cent), and ONE-Dyas Norge (10 per cent).
OKEA underscores that this acquisition further increases its net interest in the Ivar Aasen field from 2.78 per cent to 9.24 per cent and strengthens its position in the Gjøa area – where the firm holds a 12 per cent interest – through the Nova field. Therefore, the company believes that it “establishes a large presence in Bergen, as well as a strengthened presence in Stavanger,” thanks to this acquisition.