BG Group Increases Stake in Armada and Everest Fields
BG Group has signed Sale and Purchase Agreements with ConocoPhillips (COP) for the acquisition of COP's equity stakes in the Armada and Everest fields in the Central North Sea.
BG will acquire COP's 11.45% interest in the Armada field (BG operated), increasing its stake to 58.22%. In the Everest field (BP operated), BG will acquire a further 1.0134% interest taking its total stake to 59.3234%. As part of the agreement BG also agreed to purchase COP's interest in Block 22/14a (16.89%) which is located to the south west of Everest. Completion of the acquisition is expected in the first quarter of 2007, subject to standard partner and DTI consents. The total consideration is US$143 million.
Mark Carne, Executive Vice President BG Europe and Central Asia, said:
"I am delighted that we have agreed these purchases which increase our stakeholding and control in two key oil and gas fields in the UK Continental Shelf.
"The strengthening of our position in the Armada 'hub' will not only increase our equity share of production from the field but will also enhance value from the tie-backs of the Seymour and Maria fields and prospective future production from our Norwegian interests across the median line.
"The increased stakeholding in Armada and Everest reinforces our commitment to the North Sea and continues our investment in the region."
BG Group has interests in over 20 UKCS fields. It is active in 87 blocks in the UK North Sea, and is operator in 44 of them. BG Group operates the Armada, Maria and Seymour fields in the Central North Sea, the Blake and Atlantic fields in the Outer Moray Firth, and some of the Easington Catchment Area fields in the Southern North Sea (Neptune, Mercury, Minerva and Apollo).
The Armada gas condensate fields - Fleming, Drake and Hawkins - span five exploration blocks and extend over 31 sq km in the Central North Sea. Following two development phases, which were completed in September 2002 at a total cost £513 million, an average production rate of 170 million standard cubic feet per day (mmscfd) and 6400 barrels per day (bpd) was achieved in 2005.
The Everest field is also located in the Central North Sea but is operated by BP. An average production rate of 115 mmscfd and 4000 bpd was achieved in 2005. The South West Seymour area of the BG operated Seymour field (BG 57%) was successfully drilled from the Armada platform in 2002. First production was achieved in March 2003 and an average rate of 48 mmscfd and 1500 bpd was achieved in 2005. A second well was drilled into the North West Seymour area in 2004 and production of black oil was achieved in April 2006.
Production from the BG operated Maria field will be tied back to Armada. Estimated recoverable reserves for Maria and Maria Horst are in the region of 30 million barrels of oil equivalent. First production is scheduled for 2007.
Armada and Everest gas is exported via the CATS pipeline to Teesside, while the produced liquids go via the Forties Pipeline System to the Kinneil processing plant at Grangemouth.
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