BP Sheds Stake In Australian Oil-Producing Fields

BP Sheds Stake In Australian Oil-Producing Fields
Jadestone Energy has acquired BP's stake in a Woodside Energy-operated North West Shelf Oil Project offshore Australia.

Oil and gas company Jadestone Energy has acquired BP’s stake in a Woodside Energy-operated North West Shelf Oil Project offshore Australia.

The North West Shelf oil project comprises the Cossack, Wanaea, Lambert, and Hermes (CWLH) oil fields development. Located within four production licenses in the North Carnarvon basin offshore Australia, the project comprises 13 subsea wells producing through the FPSO Ohka installed at the fields in 2011 and has 60,000 bpd of oil processing capacity.

It is worth reminding that Jadestone signed a sale and purchase agreement with BP for the acquisition of a non-operated 16.67 percent in the project back in July 2022.

Jadestone said that it closed the transaction following the satisfaction of all conditions set in the sale and purchase agreement. The headline acquisition cost to Jadestone is $20 million.

Inclusive of agreed adjustments resulting from the accumulated economic benefits of the CWLH assets for the period from January 1, 2020, to completion, Jadestone will receive a cash amount of $5.75 million from BP.

In line with the sale conditions, Jadestone paid an initial $41 million into the North West Shelf Oil Project’s Abandonment Trust Fund.

The acquired interest includes BP’s entire 16.67 percent working interest in the CWLH oil fields, subsea infrastructure, Okha FPSO, and full abandonment liabilities estimated at $82 million, and represents 10.4 mmbbls of acquired reserves and resources as of the effective date of January 1, 2020.

According to the operator, production from the CWLH fields averaged 14,196 bopd for the three months ended September 2022, or 2,366 bopd net to Jadestone’s acquired interest.

Liftings of crude oil from the CWLH fields are implemented on an equity basis, with the next lifting attributable to Jadestone’s acquired interest of approximately 650,000 barrels scheduled for mid-November 2022, with receipt of the cash proceeds by Jadestone expected in December 2022.

Jadestone added that it would also apply to the National Offshore Petroleum Titles Administrator for approval of the dealing and registration of the petroleum titles relating to the acquired interest.

“We are very pleased to have gained access to this material asset, particularly as we see a very significant upside through further investment in the future. Our transaction is benefiting from the effective date, which was nearly two years ago, and the strengthening of the oil price in that same period. We will also see a positive impact from the next equity lifting, which is likely to generate significant cash proceeds for Jadestone before the end of 2022.”

“This transaction is typical of the natural transfer of interests in maturing assets from large IOCs, where materiality thresholds do not compete within their portfolios, to smaller companies willing to invest for incremental reserves and production.”

“We firmly believe that the CWLH fields will be a key asset and a strategic stepping-stone for Jadestone going forward. Over time we hope to work with the existing North West Shelf Oil Project Operator and joint venture partners to add value through sharing our expertise in the management of mature oil assets,” Paul Blakeley, President and CEO of Jadestone, said.

To contact the author, email bojan.lepic@rigzone.com



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