Lime Petroleum Buys Stake In Yme Field
Lime Petroleum, a part of the Rex Group, has entered into a sale and purchase agreement with KUFPEC to acquire its 10 percent interest in the Yme Field for $68.1 million.
Lime Petroleum said that the acquisition further strengthens its position as a full-fledged exploration and production player in the Norwegian Continental Shelf, following its acquisition of a 33.8434 percent interest in the producing Brage Field in 2021.
Production from the Yme field, operated by Spanish oil and gas company Repsol, will contribute to the Rex Group’s target of reaching production of 20,000 bpd across various geographies.
The Yme field is in PL 316 and PL316B on the Norwegian Continental Shelf. It comprises two separate main structures, Gamma and Beta, which are 7.5 miles apart. The reservoirs are in sandstone of the Middle Jurassic age in the Sandnes Formation, at a depth of 10,300 feet.
Yme was discovered in 1987, and production started in 1996. In 2001, production ceased because the operation of the field was no longer regarded as profitable. The remaining reserves at the Yme field stand at 9.70 million cubic meters of oil equivalent. With this reserve base, the field has gone through a complete redevelopment, and production started again in October 2021.
The field has undergone a commissioning period and is currently ramping up towards a plateau of about 5,000 bopd net to Lime Petroleum in the late fourth quarter of 2022. Lime Petroleum intends to commission a summary qualified person’s report on the Yme field after completion of the acquisition.
“The Yme acquisition is part of Lime Petroleum’s strategy to build value in the company by adding reserves and production. Yme will provide an additional cash-flow stream, hence reducing our current sole dependence on Brage, as well as strengthen the company.”
“Furthermore, Yme is in an early stage of development, in contrast to Brage, and we will use the experiences gained from Yme in upcoming field development projects in our portfolio. We look forward to working closely with the operator, Repsol, and our new partners, Lotos and OKEA in the months and years to come,” Lars Hubert, Chief Executive Officer of Lime Petroleum, said.
As part of the acquisition, Lime Petroleum will assume tax balances of $33 million. Including the existing tax balance of Lime Petroleum, the total tax balance will be $63 million. These deferred tax assets are recoverable for Lime Petroleum. This is especially important as the Norwegian tax system has been restructured to a cash-flow tax, among which is the removal of the specific tax incentive for exploration activities from 2022.
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