Brage platform

Norwegian exploration player turning into full-cycle E&P as Repsol exits Brage

Lime Petroleum, a subsidiary of Singapore’s Rex International, is buying Repsol’s interest in the Brage field located off Norway as part of its strategy to transform into a full-cycle E&P company.

Brage platform; Credit Wintershall Dea/Morten Berentsen

Lime Petroleum on 15 June 2021, entered into a conditional sale and purchase agreement with Repsol Norge to acquire Repsol’s 33.8434 per cent interests in the oil, gas and natural gas liquids (NGL) producing Brage field, and the five licences on the Norwegian Continental Shelf over which the Brage field straddles for a post-tax consideration of $42.6 million.

The transformational acquisition of the Wintershall Dea-operated Brage field fulfils Lime Petroleum’s ambition to transition from pure-play exploration to a full-cycle exploration and production company on the Norwegian Continental Shelf, the company explained in a statement on Wednesday. It will also enable it to establish recurrent cash flow as well as develop and drive further value in its existing portfolio.

Discovered in 1980, Brage is a field in the northern part of the North Sea, 10 kilometres east of the Oseberg field. The water depth is 140 metres and production started in 1993.  

In 2020, about 1.38 mmboe or 3,800 boepd were produced from the Brage field, net to Repsol’s 33.8434 per cent working interest. Although the Brage field has been producing for a long time, work is still ongoing to find new ways of increasing recovery from the field.

According to the Norwegian Petroleum Directorate, there are 3.42 million Sm3 of oil equivalent or 21.52mmboe of remaining reserves in the field. Accordingly, net2P Reserves of about 7.3 mmboe from the field will be added to Lime Petroleum’s current 2C Contingent Resources of 27.7mmboe.

The company believes that the economics from the current production reserve base in the Brage field are robust and there is further upside from future in-fill drilling for production and exploration drilling of high-value near-field prospects that are expected to add further production to the Brage field.

Lars Hübert, CEO of Lime Petroleum, said: “The Brage field will be transformational to the company. It will not only provide stable cash-flow to Lime Petroleum but will complement our exploration and development projects on the Norwegian Continental Shelf, both in terms of cash flow and technical expertise.

“We intend to work closely with the Brage operator and partners to maximise the value of the asset, including the near-field exploration opportunities we see within the licences”.

At the end of Brage field’s production life, Lime Petroleum will pay an effective 1.69 per cent of the total estimated decommissioning costs for the current field infrastructure.

Repsol has agreed to pay to Lime Petroleum, the Brage Decommissioning Carry limited to 95 per cent of decommissioning costs for the current field infrastructure in respect of its 33.8434 per cent interest in the field.