Bridge has completed the acquisition of a 1.55% working interest in the producing Boa field from OMV (U.K.) Limited for an adjusted consideration of $18.1 million (the "transaction") with an effective date of Jan. 1, 2012. The acquisition includes a transfer of around 40,000 barrels of oil stock which will be sold following completion for an estimated value of around $4.4 million (based on prevailing prices of around $110 per barrel).The acquisition is being funded through a combination of current cash and Bridge's existing reserve base lending facility. The acquisition increases Group 2012 production by 230 bopd and 0.2 mcfpd sales gas, which is equivalent to 260 barrels of oil equivalent per day (boepd) combined.
The Boa field
The unitized Boa field extends across the UK/Norway median line and lies 88.65% in Norway Block 24/6 and 11.35% in UK Blocks 9/15a and 9/15b. The Boa reservoir is contained within a high-quality upper Heimdal sand and comprises a light oil rim with an overlying gas cap and very strong natural aquifer drive.
The field was developed in 2008 as part of the wider Alvheim area development with three subsea development wells tied back to the Alvheim FPSO operated by Marathon Oil Norge AS. Oil is then shipped by shuttle tanker, while gas is exported into the UK market via the Beryl SAGE system. The Boa field facilities and the Alvheim FPSO has an excellent utilization record with typical uptime above 90 percent.
Boa field production
The field had produced around 25 million barrels of oil up to the effective date of the acquisition (Jan, 1, 2012) and is currently producing 15,000 bopd gross. The production performance of the field has exceeded expectation and recovery estimates have continued to increase during the field life. Potential for further infill drilling in the field has been identified as well as the development of the field gas cap.
In addition to Alvheim, the FPSO processes oil from a number of other fields which resulted in a combined throughput for 2011 in excess of 140,000 boepd. This high throughput results in very low unit operating costs for the Boa field.
The Boa working interest adds 0.5 million barrels of 2P developed producing reserves to Bridge. The field delivers low maintenance oil production with a high operating margin. Bridge estimates that at an oil price of $110 per barrel, it will receive over $100 per barrel after tax for production during 2012-2014 as a result of Bridge's accumulated tax pool. The Boa field has low exposure to decommissioning liabilities and is expected to produce until 2022.
Bridge's CEO, Tom Reynolds, commented:
"The completion of the Boa acquisition continues our previously stated strategy to build a solid cash flow base for future re-investment and growth. The Boa field delivers reliable production with very strong operating margins, which is efficiently supported by our accumulated tax pool in the UK. The addition of Boa also continues to broaden our producing assets portfolio and further diversifying our revenue streams."
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