Sequa Petroleum NV (“SPNV”) is pleased to announce that an agreement has been reached for the acquisition of Tellus Petroleum Invest AS and its subsidiary Tellus Petroleum AS (collectively “Tellus”) a company registered in Norway.
Concurrent with the acquisition, Tellus has entered into an agreement with Wintershall Norge AS (“Wintershall”) to complete a large asset portfolio transaction on the Norwegian Continental Shelf (“NCS”) acquiring working interests in 4 fields; Knarr 20%, Maria 15%, Ivar Aasen 6.5% and Veslefrikk 4.5%. Interests in seven exploration licenses and 10% in PL316 which contains Yme are also included in the transaction. As is normal for this type of transaction it is subject to consent by the Norwegian Authorities, including the approval of Tellus as a new NCS player, closing is expected at the end of 2015.
The purchase price for this portfolio is US$ 602 million, which makes it one of the major acquisitions on the NCS so far this year. In addition, Tellus Petroleum will make a further payment of up to US$100 million depending on the development of the oil price in the period from 2016 to 2019. With proven and probable (2P) reserves estimated to be 59 million boe net, based on the numbers from the Norwegian Petroleum Directorate (NPD). The production peak is expected to be in the order of 15,000 boe net per day, predominantly oil. The effective date for the transaction is 1st January 2015.
On completion of the acquisition of Tellus, SPNV will become the 100% owner. Completion is subject only to a shareholder vote with simple majority of the votes cast, for which irrevocable undertakings of 48% of its shareholders have been obtained in addition to 15% of votes held by SPNV management team.
The current management team in Tellus will continue to run the company and the organisation will be further developed to manage the portfolio.
The consideration for the acquisition of Tellus by SPNV is a combination of cash and new shares issued by SPNV to sellers of the shares in Tellus. Depending on future performance, the consideration will be a maximum of 6m SPNV shares and $4m cash.
In addition to their extensive technical and commercial expertise in Norway, Tellus brings an attractive business development portfolio with identified targets that provide additional economies of scale, with attractive incremental returns in the near term. This fits with SNPV’s strategic goal to acquire oil and gas assets that are in production or are being rapidly developed towards production.
About Sequa Petroleum
Sequa Petroleum is an oil and gas company listed on Euronext Marché Libre which focuses on taking discovered oil and gas reserves and resources from appraisal through to production. Sequa Petroleum has assembled a highly experienced management team with a proven track record and expertise in exploration, appraisal, development and production of oil and gas assets, both onshore and offshore, in jurisdictions around the globe. Sequa Petroleum is supported by a strong and dedicated shareholder base which includes its entire senior management team as well as the privately owned Principal Investment holding company Sapinda Holding BV. Sequa Petroleum pursues mid-sized discoveries that have not yet been developed for a number of reasons, e.g. commercialisation approach, technology application or lack of capital and Sequa aim to unlock opportunities and realise their potential value.
About Tellus Petroleum
Tellus Petroleum was established in 2012 by a group of entrepreneurs with background from Saga Petroleum, Norsk Hydro, Phillips Petroleum, Hess and PetroAdvisor as an independent Norwegian upstream oil & gas company with sole focus on the NCS. The aim is to establish and further enhance the value of a portfolio of interests in producing fields and small to medium sized discoveries/developments. Tellus will work the assets technically and commercially together with the operators, partners and suppliers to mature discoveries into production, including time critical satellite tie-backs to existing infrastructure and contribute to improved area solutions.
About Wintershall Holding
Wintershall Holding GmbH, based in Kassel, Germany, is a wholly-owned subsidiary of BASF in Ludwigshafen. The company has been active in the extraction of natural resources for 120 years, and in the exploration and production of crude oil and natural gas for over 80 years. Wintershall focuses on selected core regions where the company has built up a high level of regional and technological expertise. These are Europe, Russia, North Africa, South America, and increasingly the Middle East region. The company wants to expand its business further with exploration and production, selected partnerships, innovation and technological competence. Wintershall employs some 2,500 staff worldwide from 40 nations and is now Germany’s largest, internationally active crude oil and natural gas producer.
About the fields in the transaction
The Knarr oil and gas field is located in the North Tampen area, 40km north of the Snorre field with the initial discovery in 2008 and Knarr West in 2011. The field is operated by BG Group (45 %) and partners are Idemitsu (25 %), Wintershall (20 %) and Dea (10 %). The field is developed by subsea templates tied-in to a FPSO leased from Teekay and started production in March 2015. The FPSO has a
production capacity of 63,000 bbl of oil per day, and the water depth is 400 m. The oil and gas is being produced from lower Jurassic sandstones in the Cook formation at some 3,800 m. The proven and probable reserves in Knarr is 85 mill boe according to the NPD website. Ownership interest in the Knarr Gas Pipeline (20 %) is included in the transaction.
The Maria field is located in the Haltenbanken area of the Norwegian Sea. Wintershall is the Operator of the field and will retain the largest interests (35%) and operatorship post transaction. The other partner are Petoro (30 %) and Centrica (20 %). The Plan for Development and Operation (PDO) was submitted to the Ministry of Petroleum of Energy 5th May 2015. The Maria development solution is a subsea tie-back to the Kristin platform with two templates, two producers and one injector on each template with injection water from Heidrun and gas lift from Åsgard via Tyrihans. Oil will be exported via existing pipeline from Kristin to Åsgard C storage ship where it is blended and offloaded to shuttle tankers. Rich gas exported via Gassled to Kårstø and further as dry gas to the European market. Capex is estimated at NOK 15.3 bn and production is planned to commence 1st October 2018. Peak production is expected to 41,000 boe per day and gross proven and probable reserves is 190 mill boe according to NPD.
The Ivar Aasen oil field is located in the northern part of the North Sea, northwest of the Johan Sverdrup field. The partners are Det norske (operator 34.8%), Statoil (41.5 %), Bayerngas (12.3 %), Wintershall (6.5 %), VNG Norge (3.0 %), Lundin (1.4%) and OMV (0.6 %). Production is planned to commence in October 2016 and Ivar Aasen will be developed with a 4 legged Steel Jacket platform and topside facilities include 1st stage separation, produced water treatment, water injection system, living quarter, and utility and safety systems. Power and gas lift will be provided by the neighbouring Lundin operated Edvard Grieg platform. A total of 7 producers and 6 injectors (all platform wells) are planned and oil and gas will be exported to the Edvard Grieg platform via pipeline and further onwards to the Grane Oil Pipeline (to the Sture terminal) and gas via the SAGE system to the UK. Peak production is estimated at 65,000 boe per day and gross reserves are 189 million boe according to NPD. Ownership interests in the Utsira High Gas Pipeline (3.8769%) and the Edvard Grieg Oil Pipeline (2.5846%) is included in the transaction.
The Veslefrikk oil and gas field is located in the northern part of the North Sea, about 30km north of Oseberg and was discovered in 1981 in the Jurassic Veslefrikk reservoir at depths of 2,800-3,200m. The field is developed with two facilities that are bridge-linked, Veslefrikk A that is a steel jacket wellhead and drilling platform and Veslefrikk B a semi-submersible living quarter and processing platform. The field commenced production in 1989. The field is on the tail-end and has started gas blow down. Partners are Statoil (operator, 18.0 %), Petoro (37.0 %), Talisman (27.0 %), Dea (13.5%) and Wintershall (4.5 %). Remaining reserves are 34 million boe according to NPD.
10 % in PL 611 with an exploration well on the Kvalross prospect planned to be drilled in the Barents Sea in 2015
40 % equity in PL 457 in the Ivar Aasen area
Working interests in five production licenses in the Maria area; PL475 (10%), PL 475D (10%), PL 590 (5%), PL 590B (5%), and PL 638 (16%).