OKEA Closes Ivar Aasen Field Stake Buy

Norwegian oil and gas company OKEA has completed the acquisition of the 2.223 percent working interest in the Ivar Aasen field from Neptune Energy.

In late 2021, Neptune Energy said that it would be divesting its non-operated working interests in three producing fields and two export pipelines on the Norwegian Continental Shelf.

Namely, Neptune signed sale and purchase agreements with OKEA and M Vest Energy. Under the deal, the assets the company will be divesting include stakes in the producing Draugen, Brage, and Ivar Aasen fields as well as the Edvard Grieg Oil Pipeline and the Utsira High Gas Pipeline. After the transaction closes, Neptune will have no stake in any of the assets.

OKEA decided to acquire a 2.223 percent interest in the Ivar Aasen field while M Vest opted to buy a 0.8 percent interest in Ivar Aasen, 7.56 percent in the Draugen field, 4.4 percent in Brage, 1.2 percent in the Edvard Grieg Oil Pipeline, and 1.8 percent in the Utsira High Gas Pipeline.

This divesture is part of Neptune’s corporate strategy to focus its portfolio on core areas. In Norway, these are the Gjøa, Gudrun, Njord, Dugong, and Snøhvit fields.

At the time, OKEA claimed that this sort of deal strengthens its position in the Ivar Aasen area and represents a first step toward the realization of the company’s growth strategy.

Total compensation for Neptune's Ivar Aasen stake is $12 million and the acquisition increases OKEA's ownership share from 0.554 percent to 2.777 percent. The effective date of the transaction is January 1, 2022.

OKEA currently has a target production of 18,500 - 20,000 boe per day in 2022. The company stated that it finds value where others divest and has an ambitious strategy built on growth, value creation, and capital discipline.

As for the Ivar Aasen field, it produces oil from sandstone reservoirs. The field consists of the Ivar Aasen and West Cable discoveries. Oil and gas are transported to the Edvard Grieg facility for final processing.

From the Edvard Grieg offshore platform, the oil is exported by pipeline to the Grane oil pipeline and on to the Sture terminal. The gas is exported in a separate pipeline to the Scottish Area Gas Evacuation pipeline system in the UK sector.

It is worth noting that M Vest hopes to add 7-8 million barrels of oil equivalents in reserves with significant upside potential via the Neptune Energy assets buy. 

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