Newcomer Point Resources has entered the playing field as a mid-sized Norwegian exploration and production (E&P) company, signing a deal with ExxonMobil to acquire the supermajor’s operated upstream business in Norway.
The Jotun A. Image from Exxon.
Point Resources will take a significant package of operated producing assets on the Norwegian Continental Shelf (NCS) from Exxon, in addition to field assets including platforms and floating production storage and offloading vessels (FPSO). The deal will also see a transfer of ExxonMobil’s 300 offshore and onshore E&P staff in Norway; and the company’s office building in Sandnes, near Stavanger.
Exxon is selling its operated stake in the producing Balder field (100%), Ringhorne (100%), and Ringhorne Øst (77%) fields; the partially developed Forseti field (100%); the Jotun Unit, where production ceased in 2016 (90%); and adjoining exploration areas that contain several undrilled prospects. The deal also includes the Jotun A floating production facility.
Production in 2016 from the combined assets was about 60,000 boe/d, of which some 54,000 boe/d came from the ExxonMobil-operated fields. With an asset portfolio that includes several fields in the development phase, the combined company has the potential to grow its production base organically to over 80,000 boe/d by 2022, and will have reserves and contingent resources of about 350 MMboe, according to Point Resources.
Point Resources, backed by private equity firm HitecVision, revealed the deal today (29 March), however a sum for the agreement with Exxon E&P Norway was not disclosed. Point Resources did reveal that it plans to invest US$2.9 billion over the next five years on the NCS.
The deal is subject to customary regulatory and partner consents, and is expected to close in Q4 2017, with an effective date of 1 January 2017.
On completion of the transaction, the combined company will become one of the top independent oil and gas producers on the Norwegian Continental Shelf, says Point Resources.
“Point Resources has already identified a significant number of infill drilling targets within the Balder, Ringhorne and Ringhorne Øst fields and plans to drill more than 10 wells over the next five years, in order to boost production and increase oil recovery. There are also plans for further development of the Forseti field. In addition, a number of potentially material exploration prospects have been identified in the licenses around the fields. These will be matured for drilling and may provide additional resources that can be tied back through the existing infrastructure,” the duo said.
“The combination of ExxonMobil’s Norwegian operated business with Point Resources will create a new significant Norwegian E&P company, with plans to invest more than 20 billion kroner ($2.9 billion)on the Norwegian Continental Shelf over the next five years,” says Jan Harald Solstad, Point Resources chief executive. “The combined company will build on ExxonMobil Norway’s world-class operating organization, Point Resources’ excellent exploration track record and HitecVision’s financial strength and M&A capabilities, creating a strong platform for further growth. The two portfolios are highly complementary with strong near-term production and a portfolio of top-tier, low-cost development projects. We look forward to working with ExxonMobil, our new partners and Norwegian authorities to complete the transaction.”
The deal will see Point Resources grow to about 350 employees, and keep both Exxon’s offices in Sandnes and Point Resources’ office in Oslo.
“Given the number of development plans and other opportunities, no redundancies are expected within the combined company as a result of the transaction,” says Point Resources.
HitecVision and Point Resources say they intend the combined company to make further material investments in the acquired assets in order to extend field life and to maximize oil and gas recovery.
Point Resources was formed in 2016 from the merger of Core Energy, Spike Exploration and Pure Exploration to create an E&P company on the NCS.