The Brage field is located 120 km west of Bergen in water depths of 130 - 170 meters. The field was discovered in 1980 and the PDO was approved in 1991. Production from the Brage Field started in 1993 with Norsk Hydro as field operator. The Brage production facilities consist of an integrated processing, drilling and accommodation platform. The crude oil is exported to the Sture terminal via Oseberg Transportation System. Excess gas is exported through the Statpipe system to Kårstø.
The Brage field is operated by Hydro and has its own onboard drilling unit. This is an advantage in the efforts of enhanced oil recovery and in order to tap additional resources in adjacent oil prospects.
The Brage Field will be acquired by 1.1.2006 and will by the end of 2005 have produced approximately 315 mmboe. The remaining proven and probable reserves are estimated to 85 mmboe, i.e. net 10,4 mmboe to Altinex Oil. Additional efforts to increase oil recovery from the field are expected to give an additional 35 mmboe, i.e. net 4,2 mmboe to Altinex Oil. In addition several exploration prospects can potentially add further reserves. Net production to Altinex Oil in January 2006 is expected to be 3200 boepd, with a potential to increase the production to 5000 boepd in 2008. The expected end of field life is 2015.
The purchase price for the Brage field and adjacent oil prospects is USD 64 mill. This represents USD 6,15/boe for proven and probable reserves. Settlement of the purchase price is expected to take place early 2006 using own funds, debt financing and equity provided by Altinex ASA.
The estimated 2006 financial impact to Altinex Oil at current exchange rates and oil prices USD 50 - 60 pr barrel is a revenue increase of NOK 380 - 456 mill and an EBITDA increase of NOK 290 - 366 mill.
Brian Jepsen, Chairman of the board comments: “This transaction is an important break-through for Altinex Oil and establishes the company as a producing oil company on the NCS. The Brage oil field is an interesting field with a large reserve potential and Hydro as an experienced operator. This acquisition will give the company substantial revenues and earnings and will therefore also be a stepping stone in the process of acquiring new interesting producing assets.”
The company currently evaluates other deal opportunities within both production and exploration, and has applied for licenses in the Norwegian licensing round TFO 2005.
The agreement has an effective date of January 1, 2006 and is subject to approval by the Norwegian authorities.
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