Kerogen Capital plans to commit up to US$300 million to back Pandion Energy, as the company pursues exploration, appraisal and development opportunities on the Norwegian Continental Shelf (NCS) through acquisitions, farm ins and licensing rounds.
Kerogen has already made an initial commitment of $100 million, however, the price tag may increase to up to $300 million, as Pandion’s portfolio develops.
Pandion Energy, headquartered in Oslo, was formed to affect a management buy-out of Tullow Oil Plc’s Norwegian subsidiary, Tullow Oil Norge. The deal included several NCS interests: PL 636 (Cara discovery), PL 651, PL 689, PL 746 S, PL 750, PL 750 B, PL 774, PL 774 B, PL 776, PL 786, PL 791 and PL 826
Kerogen will become its majority shareholder alongside the Pandion Energy management team. Pandion Energy’s strategy is focused on participating in discoveries with resource upside and enhancing their value through appraisal drilling, near field exploration and moving the assets up the development curve.
Proceeds from Kerogen’s investment will be used to build-out Pandion Energy’s portfolio, including funding the acquisition of all licenses in Tullow Oil Norge’s existing portfolio, as well as its operational platform. This transaction remains subject to approval from the Norwegian Ministry of Petroleum and Energy, and to the pre-qualification of Pandion Energy as a licensee on the Norwegian Continental Shelf.
The initial portfolio includes a 20% interest in the Cara discovery made in September 2016 in PL 636. Cara is an attractive low breakeven oil and gas discovery with a preliminary mean resource estimate of approximately 50 MMboe located just 6km northeast of the existing Gjøa infrastructure in the North Sea.
The Pandion Energy management team has a long track record of technical, commercial and financial success in the NCS, having worked together for almost 10 years at Tullow Oil Norge and its predecessor, Spring Energy Norway, which was acquired by Tullow Oil Plc in 2013.
Kerogen Co-Founder and Managing Partner Jason Cheng said: “We are excited to partner with the highly experienced Pandion Energy management team to develop the Cara discovery and to capitalize on the many attractive opportunities we currently see in Norway. Kerogen remains attracted to the North Sea given recent market dynamics, combining attractive pricing for assets, substantial reductions in operating cost structures and Norway’s low risk stable fiscal environment.”
Pandion Energy CEO Jan Christian Ellefsen said: “Following a period of reduced investment, we see a compelling case for the Norwegian Continental Shelf. With Kerogen as a partner, we are now able to mature our portfolio while acting swiftly on attractive opportunities in the asset market. Having worked close to 10 years together, I have great confidence in the Pandion Energy team and its ability to deliver on its objectives. We look forward to the journey that lies ahead.”
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