An outfit of North Sea experts is seeking to sell off discoveries which it says ConocoPhillips should “never have relinquished”.
Painted Wolf Resources claims to own licences holding combined P50 (best estimate) recoverable resources of 683 billion cubic feet of gas.
Around half of this (316bcf) comes from a proposed redevelopment of a trio of fields in the “West Viking” area of the Southern North Sea, exploiting untapped resources from previous owners ConocoPhillips and Centrica.
Painted Wolf is led by chief executive Andy Mortimer, whose career has included time with Eni, Lasmo and smaller players including Third Point Energy, along with chief financial officer Tom Cairns, formerly of Barclays bank, and chief operating officer Grant Emms, who has worked for firms including Amoco and Nexen.
Petrofac and Fenix Delft have carried out drilling, concept select and well design studies on their proposals, with a competent person’s report from ERC Equipoise.
The Viking redevelopment alone, in licence P2606, has a net present value of £707 million at 60p per therm, the company claims, which is far below current gas prices.
Mr Mortimer said the recent surge in prices had not been expected, though it bodes well for their “drill-ready” prospects.
“It’s difficult not to be optimistic in this environment at the moment. One thing that the market is doing is believing in the opportunities, which is really underpinning it.
“We do believe that we have found some significant volumes of gas that ConocoPhillips and Centrica left behind.”
Conoco Phillips ceased production of the Viking area in 2016.
Mr Mortimer added: “Viking should never, ever have been relinquished when it was, it was just that ConocoPhillips wasn’t prepared to put the manpower and resources into it and then they left.”
Assets
Painted Wolf’s P2606 discoveries include Vesper, a south-east extension of the Viking C field, Viscount south-east, and Alison – formerly the ConocoPhillips “Kx” and Centrica “Wx” fields.
The firm also has an undeveloped discovery “Amanda” which was found in 2003 and appraised three years later.
© Supplied by Painted WolfThe West Viking concept select study, from Petrofac, has been based on use of the nearby Southwark platform, owned by IOG – another firm now taking advantage of underexploited fields in the Southern North Sea.
Painted Wolf also has the Monterey discovery in licence P2588, found by Arco in 1989 and appraised by Wintershall in 2006.
Petrofac’s concept study suggests Shell’s Carrack or Cutter assets or Spirit Energy’s Markham or Grove for developing Monterey.
Plan
Painted Wolf acquired the licences in the OGA (now the North Sea Transition Authority) 32nd licensing round in 2020.
CFO Tom Cairns said: “This was a time when there was such a low level of activity and people really viewed the Southern North Sea as being past its day.
“But we could see that there were loads of situations where we could develop and work up opportunities to a point where the existing infrastructure owners would hopefully want to own those opportunities to put additional volumes across their platforms and into their pipelines.”
Unlike Deltic Energy which has farmed down operatorship of its assets to the players including Shell and Capricorn Energy, Painted Wolf seeks to sell the company as a whole.
© Supplied by ConocoPhillipsThe firm, founded in 2013, “never set out to try to go out and drill wells ourselves” and always sought to bring in a third-party.
Comprised of a core team of 12, each member works for shares and an exit has been a part of the plan from the get-go. However the firm has been looking into a sale this since April last year, so the current price surge has come as a happy coincidence from their perspective.
COO Grant Emms said: “It’s time to sell because we’ve matured these things all into drill-ready opportunities. We have invested a huge amount of time and effort into getting it to the point where there’s a portfolio with obvious value in it.
“There is still considerable time left on the licence for the buyer to put these things into their plans, and it’s a good time in the market. So it all converges as to why this is the right time to market the business.”