Paladin Acquires Interest in Veslefrikk Field
Paladin has signed a Sale and Purchase Agreement with TotalFinaElf Exploration Norge AS under which Paladin will acquire TFE's 18 percent interest in the Veslefrikk Field in the Norwegian North Sea, increasing its overall stake in the field to 27.0 percent.
The consideration is NOK 110 million (approximately US $15 million) in cash, subject to adjustments for working capital as at the effective date of October 1, 2002 and for cash flow movements between the effective date and completion, which is expected to take place during the first quarter of 2003. The consideration will be satisfied from the Company's bank facilities.
The Veslefrikk Field, which is operated by Statoil, came on stream in 1989 and is currently producing at approximately 30,000 barrels of oil per day ('bopd') (8,000 bopd net to a 27 percent interest) with production forecast to continue until at least 2014. Proven and probable oil reserves acquired as at the effective date are approximately 15 million barrels.
The planned 2003 work program includes an active infill and exploration drilling program. In addition, Statoil has recently initiated a field-wide project targeted at boosting production and reducing operating costs.
On completion of the transaction, Paladin's net daily production is expected to increase from 33,000 to approximately 38,000 barrels of oil equivalent per day.
The acquisition is subject to the approval of the Norwegian regulatory authorities and to Norwegian State pre-emptive rights.
Roy Franklin, Chief Executive of Paladin, commented: 'This interest was no longer material for TFE and provided Paladin with the opportunity to treble our interest in the field on attractive terms and with no incremental overhead costs.'