Author: Oksana Hillervik

The Improved Recovery Award is awarded by the Norwegian Offshore Directorate to production licenses, companies, projects or individuals for their commitment to improved recovery.

The Improved Recovery Award, formerly known as the Improved Oil Recovery (IOR) Award, is a recognition of creativity, persistence and appetite for risk when it comes to applying methods and technology that can improve oil and gas recovery beyond what is expected under existing plans and methods.

“Congratulations, Team Valhall and Hod – this award is for you!” exclaimed Ole Johan Molvig, Senior Vice President for the Valhall area at Aker BP. On behalf of Aker BP together with partner Pandion Energy, he accepted the Norwegian Offshore Directorate’s “Improved Recovery Award” at the ONS conference on Tuesday 27 August.

The Valhall and Hod fields, located in the southern part of the North Sea, have produced nearly four times more oil and gas than originally estimated in their development plans. The Norwegian Offshore Directorate’s justification for the award highlighted that Aker BP’s takeover of the operatorship in 2016 marked a change of pace in the further development of these fields. Since becoming a licensee in 2017, Pandion has also played an active role as a partner.

“Since becoming a partner in the Valhall and Hod license in 2017, we have actively participated in two flank developments. Now, with the PWP project underway, we have embarked on our third development in the area with AkerBP. The collaboration within the partnership has been strong, fostering a culture where we can challenge and complement each other in advancing the Valhall and Hod area further, including testing of new technologies. This approach has paved the way for innovation, creativity, and not least willingness to invest. The results are evident, with production now expected to extend well into the 2050s”, says CEO of Pandion Energy, Jan Christian Ellefsen in a comment.

The Valhall field was discovered in 1975, with production starting in 1982 under Amoco’s operatorship. The nearby Hod field started production in 1990. Since then, more than one billion barrels of oil equivalent have been produced from the area. The ambition is to produce an additional one billion barrels over the next 40 years.

In the justification for the award, it is emphasised that “This year’s award winner has ambitious plans to implement newly developed technology to increase production from tight reservoir formations. With the PH platform and flanks, power from shore was established in 2013 – significantly reducing emissions.”

“The licensees have shown willingness to take risks and to pursue long-term planning to achieve energy-efficient development of these fields. They are accomplishing this by using digital technologies and by cooperating with technology companies and research institutions,” says Torgeir Stordal, Director general of the Norwegian Offshore Directorate.

The Improved Recovery Award was first awarded in 1998. Since 2012, the prize has been awarded during the Offshore Northern Seas (ONS) conference.

 

About the award and previous winners:

Improved recovery award for creativity, perseverance and appetite for risk (sodir.no)

The Improved Recovery Award – The Norwegian Offshore Directorate (sodir.no)

 

Read more:

Aker BP: Valhall wins the Norwegian Offshore Directorate’s award for improved recovery

 

Jan Christian Ellefsen, CEO of Pandion Energy, stated the following:

As we reflect on the journey of Pandion Energy through 2023, the year stands out as a year with focus on unlocking the inherent value of our portfolio and ensuring safe and efficient operations and production.

“The Valhall, Hod and Nova fields have not only met, but surpassed our production targets for the year. On Nova, we successfully completed a side-track drilling operation to improve the location of one of the water injector wells. At Valhall, we conducted an effective well intervention campaign leading to an impressive production performance.  This performance was achieved despite operational challenges, which included a temporary shutdown at the Valhall and Hod fields. This accomplishment is a testament to our resilience and operational excellence.”

Pandion Energy has over the years built a highly competent team, with extensive subsurface expertise and field development capabilities. Over the company’s seven years, Pandion Energy has made six discoveries out of seven drilling campaigns, representing a success rate exceeding 85 per cent. The company’s core focus remains in the mature areas close to existing infrastructure in the greater Valhall and Gjøa areas of the North Sea, and the Haltenbanken area of the Norwegian Sea.

“Our financial trajectory in 2023 has been nothing short of impressive, with a record-breaking turnover of USD 223.4 million and robust EBITDAX margin. Our cost efficiency has been maintained at USD 10 per barrel produced and our carbon footprint for 2023 was 1.5 kilograms of CO₂e per barrel of oil equivalent. This is a carbon intensity per barrel amongst the lowest in the global E&P industry, as well as Norway. I wish to extend a heartfelt thank you to our motivated team and partners. Their strong commitment is the foundation of our success,” Ellefsen continues.

Average net production for Pandion Energy was 8,304 barrels of oil equivalent per day (boepd), an increase of 46 per cent from the average of 5,697 boepd in 2022.

With its strong financial position, Pandion Energy is well positioned for future operations on the Norwegian continental shelf. The company remains committed to its strategy of being an active and responsible partner, and a full-cycle oil and gas company with long-term ambitions.

Pandion Energy combined annual report 2023

BNP Paribas, a lender in Pandion Energy`s reserve based lending (“RBL”) facility announced in 2023 an energy transition strategy which included an exit path from oil production financing. BNP Paribas has now transferred their shares in Pandion Energy`s RBL facility to Deutsche Bank, an incumbent lender, while also bringing aboard a new lender, SpareBank 1 SR-Bank.

The official announcement was made on Tuesday, 16 January, by the Ministry of Energy.

For additional details on the APA 2023 Licensing Round, please refer to the Ministry of Energy’s official website (https://www.npd.no/en/facts/production-licences/licensing-rounds/apa-2022/).

For more information about Pandion Energy please visit: www.pandionenergy.no

 

The Ofelia appraisal well, 35/6-4 S, in the Agat formation has been completed. The estimated recoverable volume is in the range of 16-33 million barrels of oil equivalent (mmboe).

In addition to the appraisal well for Ofelia, a side-track was drilled into the overlying Kyrre formation, resulting in a new gas discovery. Estimated recoverable resources are between 11-19 mmboe of gas, bringing the total recoverable volume from both discoveries to approximately 27-52 mmboe.

CEO of Pandion Energy, Jan Christian Ellefsen, said:

“Located in a core area for Pandion Energy, the size and quality of the Ofelia and Kyrre discoveries are highly encouraging. Given the proximity to Gjøa and the operator’s development track record, we are confident this will turn into another fast track, cost-effective and low carbon development.”

Ofelia and Kyrre are located 23 kilometres north of the Neptune-operated Gjøa platform and will be considered for development as tie-backs to Gjøa. The Gjøa platform is electrified with power from shore and produces at less than half the average carbon intensity of Norwegian Continental Shelf fields.¹

Bente Flakstad Vold, VP Exploration & Appraisal in Pandion Energy, added:

“The successful Ofelia appraisal and the new gas discovery are the result of a focused exploration effort in the Greater Gjøa Area since we took part in the discovery of Duva in 2016.

We now look forward to applying the learnings from this well on our extensive exploration portfolio in the surrounding area. The appraisal well proved very good reservoir properties in an additional fairway in the Agat Formation, boosting our expectations of the Agat reservoir in the Horatio wildcat well to be drilled in PL 1109.”

 

Partners: Neptune Energy (operator, 40%), Wintershall Dea (20%), Pandion Energy (20%), Aker BP (10%), and DNO (10%)

For further information see press release from the operator Neptune Energy (Neptune Energy announces Kyrre discovery & confirmed Ofelia volumes in Gjøa area | Neptune Energy).

 

Notes to editors:

1) CO₂ emissions from Gjøa are estimated at 3kg of CO₂ per boe (EnvironmentHub (EEH); CO₂ emissions and Diskos; Gross production incl. tie-ins, 2020), average on the Norwegian Continental Shelf is 8 kg CO₂/barrel (NOROG Miljørapport 2020).

The fields that are located 50 kilometres apart and are operated by Aker BP ASA. Pandion Energy AS is partner in Valhall and PGNiG Upstream Norway AS is a partner in Fenris. The joint development comprises a new centrally located production and wellhead platform (PWP) bridge-linked to the Valhall central complex, and an unmanned installation (UI) on Fenris that will be subsea tied back to the PWP. The project will extend Valhall’s lifespan and unlock substantial reserves.

Extending the lifetime of Valhall with low emission reserves

New reserves resulting from the joint development project are estimated at 230 million barrels of oil equivalents. The project also ensures a lifetime extension for Valhall beyond 2028 and continued production from the existing Valhall reserves, estimated at 137 million barrels. The development will utilise the existing power from shore infrastructure, with minimal emissions, estimated at less than 1 kg CO2 per barrel.

See also press release from Aker BP: (Norwegian only)

Jan Christian Ellefsen, CEO of Pandion Energy, stated the following:

“In 2022, our company experienced its strongest year of growth to date. We made several significant achievements, including the acquisition and integration of ONE-Dyas Norge AS, first oil at Hod B and Nova, and the successful drilling of two wildcat wells, both proving hydrocarbon accumulations with commercial potential. In addition, we partnered in our fourth PDO, namely the Valhall PWP development project.

“Our highly motivated team has made tremendous efforts this year, both through integrating new assets and continuing to create value in our ongoing business. This has resulted in our best year ever with a turnover of more than USD 200 million.

Looking ahead, Pandion Energy will focus on enhancing its portfolio of high-quality assets while continue to look for attractive growth opportunities. Operationally, we expect 2023 to be another exciting year for the company, with an expected increase in production at Nova and an appraisal well at Ofelia discovery planned drilled this summer.”

Total revenues and other income for 2022 increased 55 per cent to USD 213.1 million (2021: USD 137.9 million). The increase in revenues is mainly driven by the increase in realised oil and gas prices.

Average net production for Pandion Energy was 5,236 barrels of oil equivalent per day (boepd), a slight increase from the average of 5,152 boepd in 2021. Upon reaching its full production potential, Nova is expected to more than double the company’s daily production level.

With a strong balance sheet, Pandion Energy is well-positioned for future consolidation activities on the Norwegian continental shelf. The company remains committed to its strategy of being an active, responsible partner and a full-cycle oil and gas company with long-term ambitions.

Pandion Energy Combined Annual Report 2022

The APA award was announced by the Ministry of Petroleum and Energy on Tuesday 10 January. For more information about the APA 2022 Licensing Round see Ministry of Petroleum and Energy’s website.

Pandion Energy has been awarded the following licenses:

• License PL 1180 in blocks 35/9,12 and 36/7,10 is located in the Greater Gjøa area in the North Sea. Pandion Energy has been offered a 30 percent participating interest in PL 1180.
• License PL 1149 B is additional acreage to PL 1149 located west of the Nova field in the North Sea. Pandion Energy holds a 30 percent interest in the license.

CEO of Pandion Energy, Jan Cristian Ellefsen stated the following:

We are pleased that we have been awarded the areas we applied for in the APA 2022 licensing round. The licences are located in one of our core areas and fit well with our existing portfolio including the Nova field which was put on stream during 2022 and the recent Ofelia discovery in production license 929. This year’s APA awards is in line with our strategy of being an active, full-cycle partner driving value in high-quality assets on the NCS.

The joint development project, located in the southern part of the North Sea, comprises a new centrally located production and wellhead platform (PWP) bridge-linked to the Valhall central complex with 24 well slots, and an unmanned installation (UI) with 8 slots at Fenris (formerly King Lear) subsea tied back 50 kilometres to the PWP.

CEO of Pandion Energy, Jan Cristian Ellefsen stated the following:

“Since taking a 10 percent ownership in the Valhall and Hod fields in December 2017, we have been an active partner cooperating closely with the operator in the further development of the Valhall area. We are very pleased to be a part of today’s PDO submittal, which is our third with Aker BP in the Valhall area and the fourth overall for Pandion Energy as a company. Being fully electrified from shore since 2013, the Valhall area also fits well with our Net Zero Carbon Strategy. We look forward to contributing further to optimizing the Valhall infrastructure and, through this, capture more of the remaining resource potential in the area.”

Increased production with minimal emissions

The total new reserves developed by the joint development project are estimated to 230 million barrels oil equivalent (mmboe) gross. A total of 19 wells are planned to be drilled, of which 15 at Valhall PWP, recovering 70 mmboe with first oil in second quarter 2027. The project will also involve a modernisation of Valhall that ensures continued operation when parts of the current infrastructure are to be phased out in 2028, thus enabling production of the remaining Valhall reserves from 2029 onwards, which are estimated at 135-140 mmboe gross.

The development will leverage Valhall’s existing power from shore system with minimal emissions, estimated at less than 1 kg CO2/boe.

The joint development project implies significant synergies in the development and operational phases for the Valhall and Fenris license partners. Total investments in the Valhall PWP – Fenris development are estimated at NOK 50 billion in real terms.

The Valhall asset and field is currently undergoing a major modernization and the new PWP installation will become an integrated part of the Valhall field taking over key global functions as other facilities are phased out.

See also full press release from Aker BP: https://akerbp.com/borsmelding/submitting-pdos-for-valhall-pwp-fenris/

About Production licenses and partners:

• Partners in Valhall Unit (PL 006B and 033B): Aker BP (90%, operator), Pandion Energy (10%)
• Fenris (formerly King Lear, PL146, 146B 333 and 1088): Aker BP (77.8%, operator), PGNiG (22.2%)

About Installations:

• Valhall PWP: A production and wellhead platform (PWP), bridge-linked to the Valhall central complex
• Fenris: An unmanned installation (UI), subsea tied back 50km to Valhall PWP

Preliminary volume estimates are between 1 and 3.5 million standard cubic meters (MSm3) of recoverable oil equivalents, corresponding to 6-22 million barrels of oil equivalent (boe).

VP Exploration & Appraisal, Bente Flakstad Vold stated the following:

This is our fifth consecutive discovery in mature areas on the Norwegian continental shelf. Pandion Energy actively targets near field exploration opportunities which allow for low cost and low carbon developments. The partners in the Calypso license will now study options to effectively develop the discovery using nearby infrastructure.

“We would like to congratulate both the operator Neptune Energy and the Deepsea Yantai team on yet another successful drilling operation.”

Pandion Energy is also partner in the Neptune Energy operated Ofelia discovery in the North Sea announced in August (link).

The Calypso discovery is located 14 kilometres north-west of the Draugen field and 22 kilometres north-east of the Njord A platform.

Well 6407/8-8S was drilled to a vertical depth of 3496 metres and encountered an estimated 8 metre thick gas column and 30-metre thick oil column in a 131 metres thick Garn Formation sandstone reservoir, of good to very good quality.

The well was drilled by the Deepsea Yantai, a semi-submersible rig owned by CIMC and operated by Odfjell Drilling. The partners in the license are: Neptune Energy (operator, 30%), OKEA ASA (30%), Pandion Energy AS (20%) and Vår Energi ASA (20%)