Longboat Energy is to acquire minority stakes in two units of Norway’s Statfjord oil field, in a deal that will offer the company its first producing assets.
Longboat (AIM:LBE) will take on a 9.6% interest in licence PL089 from INPEX Idemitsu, as part of a deal worth $12.75 million in cash and with an effective date of 1 January 2023.
The stake includes a 4.8% unitised interest in Statfjord Øst and a 4.32% interest in the Sygna Unit – referred to by the company as the Statfjord satellites.
The deal will add production of around 300 barrels of oil equivalent per day (boepd) net to Longboat and audited 2P reserves of 1.55 million boe, of which approximately 77% is oil and NGLs.
However, an infill drilling programme at Statfjord Øst set to begin next year is expected to double production from the unit.
Accordingly, the company expects payback on the transaction in under two years, and has funded the acquisition via the recent investment in the firm by JAPEX.
Unveiled in May, the deal to create a Norwegian JV saw JAPEX offer a cash investment of up to $50m for 49.9% of the Longboat venture, along with a $100m financing facility.
Statfjord Øst is lies 3 miles to the northeast of the Statfjord field in a maximum water depth of 190 metres. The field began production in 1994 from two subsea production templates and one water injection template tied-back to the Statfjord C platform.
Partners include operator Equinor (43.25%), Petoro (30%), Vår Energi (20.55%), INPEX Idemitsu Norge (4.8%) and Wintershall Dea (1.4%).
A redevelopment plan was submitted to regulators in 2021 to which would see five new production wells drilled into potentially undrained areas of the field while also adding gas-lift to increase production levels.
This drilling programme is currently underway and expected to last until the end of 2023, Longboat said, after which it eyes a “material uplift to production” in 2024.
In the period to 30 April 2023, Statfjord Øst had gross production of roughly 5,200 boepd from one well, equivalent to arounf 250 boepd net to INPEX’s working interest.
Sygna is northeast of the Statfjord Nord field in 300 metres water depth and produces oil and gas.
Discovered in 1996, the field began production in 2000 from three production wells tied-back via a subsea template to the Statfjord C facility. A long-reach water injection well was also drilled from the Statfjord Nord template.
In the period to 30 April 2023, Sygna had gross production of ~1,300 boepd from one well, equivalent to ~60 boepd net to INPEX Idemitsu’s share.
Sygna partners are Equinor (43.425%), Petoro (30%), Vår Energi (20.995%), INPEX Idemitsu (4.32%) and Wintershall Dea (1.26%)
In addition, Longboat has entered into a decommissioning security agreement with INPEX and will pay a further deferred, consideration of $1.75 million in equal stages over the next 18 months. This will be returned to the firm after the successful decommissioning of the field, currently anticipated in the late 2030s.
Longboat chief executive Helge Hammer said: “We are pleased to announce our first production acquisition in Norway, the next step in realising our growth ambitions on the Norwegian Continental Shelf. The Statfjord Satellites are two high-quality, long-life assets undergoing an exciting and transformative redevelopment led by Equinor.
“Longboat’s ability to secure this acquisition through a bilateral negotiation continues to demonstrate the Company’s deep relationships in Norway and is an important next step in creating a full cycle E&P company.”