Author: Oksana Hillervik

In December 2018, Pandion Energy reached average daily production of 5,000 barrels per day. This was achieved in less than 12 months since the completion of the Valhall & Hod transaction with Aker BP, in which the Company acquired a 10 percent interest in the assets, and only 1,5 years after the Company was prequalified as a partner on the NCS.

Pandion expects to continue to increase production through bringing in new projects onstream, such as Cara and Valhall West Flank development projects.

Jan Christian Ellefsen, the CEO of Pandion Energy commented:

“I am very pleased with our team and the strong support from our financial sponsor Kerogen Capital, a powerful combination that has enabled us to grow so rapidly.  Looking back at the business plan we started out with two years ago, we have achieved most of our growth objectives in less than half the time.”

Jan Christian Ellefsen continues:

Going forward, we will maintain our full-cycle strategy across all phases from exploration through to production on the NCS, and we will continue to actively seek opportunities through licensing rounds, farm-ins as well as M&A.

The Cara license, PL 636, operated by Neptune Energy Norge AS (Neptune Energy) with Pandion Energy AS (Pandion Energy) as 20 percent partner, continues forward with a subsea development solution for the field located in the Norwegian North Sea.

The proposed concept is a subsea tieback to the Neptune Energy operated Gjøa platform. Neptune Energy (operator) has on behalf of the Cara license submitted the “Decision to Continue” (BOV) report to the Ministry of Petroleum and Energy. The license partnership now enters the define phase of the project, refining the technical and economic plan before committing to a final investment decision.

The Cara field is located six kilometers northeast of the Gjøa field and about 60 kilometers of mainland Florø. Cara is expected to yield between 56-94 million barrels of oil equivalents, which corresponds to be in range of 9-15 million standard cubic meter (MSm3).  Idemitsu Petroleum Norge AS and Wellesley Petroleum AS are also license partners in the field.

For more information on the Cara development, please see Neptune Energy’s press release.

Pandion Energy is pleased to announce that the Company’s NOK 400 million senior unsecured bond “Pandion Energy AS Senior Unsecured Callable Bond Issue 2018/2023” with ISIN NO 0010820103 has been listed on the Nordic ABM.

DNB Markets and Pareto Securities acted as Joint Lead Managers for the bond issue.

Pandion Energy has had a flying start since inception in November 2016, outperforming the main objectives set out for the first year as a new company. 

“We were all excited and eager to get going after securing financial support from Kerogen Capital to execute the management buy-out of Tullow Oil’s Norwegian operations at the end of 2016. Our initial target was to develop a portfolio of 100 mmboe of reserves and contingent resources. With the acquisition of a 10 percent interest in the Valhall & Hod producing fields from Aker BP ASA (“Aker BP”), Pandion Energy has transformed into a full-cycle oil and gas company, and came close to achieving our target within our first year of existence” says CEO of Pandion Energy, Jan Christian Ellefsen.

With the acquisition of a 10 percent interest in the Valhall & Hod producing fields from Aker BP, Pandion Energy has transformed into a full-cycle oil and gas company, and came close to achieving our target within our first year of existence.

In December 2017, the combination of a great team effort and strong investor support enabled Pandion Energy to acquire a 10% share of the Valhall & Hod fields from Aker BP.  The company was able to evaluate the assets, and negotiate and complete the transaction within only four weeks. The speed of the transaction truly demonstrated Pandion’s ability to move swiftly when attractive opportunities arise.

“The transaction also reflected our team’s technical, commercial and financial capability on the NCS, having worked together for almost ten years. It also showed that matching our competence with that of our majority investor, Kerogen Capital, increases both our confidence and level of precision when considering quality assets such as the Valhall & Hod fields. I was personally pleased to see that we, as a young organisation, truly lived up to our core values; professional, agile, commercial and team player”, tells Jan Christian Ellefsen.

During 2017, Pandion also continued high-grading the existing portfolio with the relinquishment of certain sub-commercial exploration licenses that came with the management buy-out in 2016. The key asset from this transaction, the Cara discovery operated by Neptune Energy, had a material upgrade in resource estimates. The company was also awarded two promising licenses in the 2017 Awards in Predefined Areas (“APA”) licensing round.

An active partner

“In the daily work, Pandion Energy strives to be a active partner in all their licenses by ensuring that operators continue this improvement trend and deliver projects on time and budget. The company works proactively with operators to target upsides in and around proven assets, and continue to seek other attractive growth opportunities through M&A, farm-ins and participation in licensing rounds.

Our ability to create long-term, lasting value rests on maintaining high standards of governance, sustainable business practice and operations.

“Our ability to create long-term, lasting value rests on maintaining high standards of governance, sustainable business practice and operations. Sound business decisions are a product of a strong team, an active board of directors and a competent owner, and 2017 was a year where this symbiosis worked seamlessly. We are very pleased that we now in June also got our efforts confirmed with a clean audit report from the Petroleum Safety Authority of Pandion Energy as a licensee on the NCS”, tells Ellefesen, and continues:

“We are very pleased with the continued support of our financial backer, Kerogen Capital, as well as our bond investors and bank lenders as evidenced by our recent capital raise in April. Coupled with our highly competent team, I am certain that this will enable Pandion Energy to create further value both for our shareholders and the Norwegian society in the years to come.”

Downloads/Links:

• Pandion Energy 2017 Annual Report
• Petroleum Safety Authority Norway –  Audit of Pandion Energy AS

With the successful completion of its first major debt financing, Pandion Energy AS (Pandion Energy) has established a solid financial platform for continued investments in the company’s high-quality asset portfolio and future growth. Pre-qualified as a licensee on the Norwegian continental shelf in June 2017, the company currently holds a 10 percent interest in the Valhall & Hod fields, 20 percent interest in Cara development project, and interests in further six exploration licenses.

The debt financing package includes a reserve based lending (“RBL”) facility of USD 150 million with an accordion of USD 150 million, and a senior unsecured bond of NOK 400 million. Together with the NOK 400 million exploration financing facility completed in November 2017, Pandion Energy’s investment program is now fully financed with ample room for additional growth opportunities.

Commenting on the financing process, Jan Christian Ellefsen, CEO of Pandion Energy’s said:
“We are very pleased to have completed the debt financing as planned, and to have received such strong support from both leading Nordic and international banks, as well as institutional bond investors. The new capital structure provides us with substantial funding for the ongoing investments in our high-quality asset portfolio, and flexibility to support the future growth of Pandion Energy.”

• On 9 April 2018, the USD 150 million RBL facility was signed with BNP Paribas, DNB, ING and SEB. The facility has a 7-year final maturity (April 2025) and will be initially utilized to refinance existing shareholder loans and future capex commitments on the Valhall and Hod fields, as well as the Cara development project. The RBL facility has an uncommitted accordion of USD 150 million to provide room for financing of additional acquisitions and new development opportunities.
• On 4 April 2018, Pandion completed its debut issue of a NOK 400 million senior unsecured bond with maturity in April 2023. The bond issue was well received by Nordic institutional investors and was significantly oversubscribed. The bond will be listed on the Nordic ABM, a marketplace regulated by Oslo Børs, within 6 months. Nordic Trustee has been appointed as bond trustee.

DNB Markets and Pareto Securities acted as joint lead managers and bookrunners with SEB as co-manager of the bond issue.

Arntzen de Besche acted as legal advisor to Pandion Energy. RBL banks were advised by Michelet & Co and managers of the bond issue were advised by Wikborg Rein.

The Ministry of Petroleum and Energy has approved the plan for development and operation (PDO) for Valhall Flank West development on Friday 23 march.

Aker BP ASA is the operator of the Valhall and Hod fields. Pandion Energy AS holds 10% ownership interest in the Valhall area, including licenses PL006B, PL033 and PL033B.

Valhall is one of the largest oil fields in the southern part of the Norwegian sector in the North Sea. The Valhall Flank West project aims to continue the development of the Tor formation in Valhall on the western flank of the field, with startup of operation in fourth quarter 2019.

Valhall Flank West will be developed from a new Normally Unmanned Installation (NUI), tied back to the Valhall field centre for processing and export.

Recoverable reserves for Valhall Flank West are estimated to be around 60 million barrels of oil equivalent.

Further details available from the Ministry’s website (Norwegian only).

Pandion Energy AS (Pandion Energy) has been awarded two new prospective exploration licenses under the 2017 Norwegian APA (Awards in Pre-defined Areas) License Round on the Norwegian Continental Shelf.

The APA award was announced by the Minister of Petroleum and Energy (MPE), Terje Søviknes on Tuesday 16. January. For more information about APA 2017 see MPE’s website.

Both licenses are located in the Norwegian North Sea:

• License PL 912 (blocks 16/4, 5 & 7) is located at the southern margin of the Utsira high, south east of the Luno II discovery and west of PL 776 where Pandion Energy is a partner with 40% participating interest. Pandion Energy is pleased to be offered the opportunity to bring our work from this area into the new license. Pandion Energy has been offered a 30% participating interest in PL 912.
• License PL 929 (blocks 35/6 & 36/4) is located at the Måløy slope, between the Agat field to the north and the Gjøa field to the south. PL 929 lies in an area of strategic importance to Pandion Energy, where the team can utilize the experience from PL 636 and the Cara discovery to the south of the license. Pandion Energy has been offered a 20% participating interest in PL 929.

To Pandion Energy, these annual rounds in mature areas represent a very important source to attractive exploration opportunities.

Jan Christian Ellefsen, Pandion Energy’s CEO, commented:

“We are very pleased to be awarded these two licenses in the Awards in Predefined Areas (APA) 2017 round. To Pandion Energy, these annual rounds in mature areas represent a very important source to attractive exploration opportunities. The Cara development project in PL 636, one of the largest oil and gas discoveries in 2016, is a good example of the value creation potential in mature areas, awarded as part of the APA 2011 round. Having focused extensively on technical quality and appropriate risk-reward in our application work, we now look forward to maturing the exploration targets identified in these licenses further together with our partners.”