Author: Oksana Hillervik

Pandion Energy AS (Pandion Energy) has entered into an agreement with Aker BP ASA (Aker BP) to acquire a 10 percent interest in the Valhall area, including licences PL006B, PL033 and PL033B.

Since production commencement in 1982, the Valhall field continues to be one of the largest oil fields in the southern Norwegian North Sea. Together with Hod field over one billion barrels of oil equivalent has been produced, more than three times the initial expected volume. Following commissioning of a new combined production and hotel platform in 2013, the field is currently producing ca. 37.5 kboepd* and is expected to continue to produce for several decades. Aker BP, the operator of Valhall field, has stated an ambition to produce at least an additional 500 million barrels of oil equivalent.

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

We are pleased and proud to be chosen by Aker BP to partner on such a high quality asset. By acquiring a 10 percent interest in Valhall, Pandion Energy gains exposure to a material production base with significant value-creation potential through near-term growth projects and substantial resource upside from field redevelopment, appraisal and exploration opportunities.

This is an important milestone in the growth of Pandion Energy, which was established in November last year. The company also holds a 20 percent interest in the Cara development project, one of the largest discoveries on the Norwegian Continental Shelf in 2016, where ENGIE E&P is the operator.

The transaction is subject to customary conditions for completion, including approval by the Norwegian Ministry of Petroleum and Energy.

For more information on Valhall, please see: https://www.akerbp.com/en/our-assets/production/valhall/

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*Average gross production rate for first 9 months in 2017

Pandion Energy has entered into a loan agreement with BNP Paribas and Skandinaviska Enskilda Banken AB (publ) (SEB) for the financing of its exploration and appraisal activities on the Norwegian continental shelf (NCS). The facility amount is NOK 400 million with an accordion of NOK 200 million.

Jan Christian Ellefsen, Pandion Energy’s CEO, commented:
“Investments within exploration and appraisal projects are a core part of our growth strategy and with the Exploration Finance Facility (EFF) secured, we now have all the tools in place to execute on our business plan. We are very pleased with securing our first finance facility with two highly experienced E&P banks that can support us as we develop and expand our portfolio.”

The banking facility will work in combination with previously committed equity capital from Kerogen Capital. Earlier this year Kerogen Capital announced that it may commit up to US$300 million to Pandion Energy as its portfolio develops.

Pandion Energy, founded in November 2016, is a private oil and gas company focusing on exploration, appraisal and development opportunities in all parts of the Norwegian Continental Shelf (NCS). The company was prequalified as a Licensee on the NCS in June this year. Pandion Energy has recently applied for licenses in the Awards in Predefined Areas (APA) round and is currently also assessing other investment opportunities on the NCS.

ENGIE E&P, the operator of the Cara-licence (PL 636) in the Norwegian sector of the North Sea has increased the resource estimate for the Cara discovery to 56 – 94 million barrels of oil equivalent. Pandion Energy has a 20% interest in the Cara licence PL636.

Cara is a gas and oil discovery in PL 636 in block 36/7, located approximately 14 kilometres from the ENGIE E&P operated Gjøa facilities. The original volumes were estimated to be between 4.5 and 12 million standard cubic metres (MSm³) of recoverable oil equivalent, which corresponds to 25 – 70 million barrels. This made Cara the second largest discovery on the Norwegian continental shelf in 2016, according to the Norwegian Petroleum Directorate.

Increase in volumes

The operator now estimates the volumes of the discovery to be in the range of 9 – 15 million standard cubic metres (MSm³) of recoverable oil equivalent. This corresponds to 56 – 94 million barrels.

Since the discovery in 2016, the expanded data acquired during drilling and testing of the well has been analysed, resulting in increased volumes, which give improved economics and a more robust field development project.

Tie-back to Gjøa

This week, the Cara-licence reached the “Concretisation Decision”*, which is the feasibility decision gate in the Norwegian petroleum system. At this stage, the licensees have identified at least one technical and economically feasible concept that provides a basis for initiating studies that should lead to concept selection by 1^st November 2018.  The suggested concept involves a tie-back to the ENGIE E&P operated Gjøa-facilities.

Expected start-up of production at the Cara field is being targeted for late 2020/2021.

Strengthened foundation for further growth for Pandion Energy.

Jan Christian Ellefsen, the CEO of Pandion Energy commented:
“This is positive news and in line with our own understanding of the discovery. This represents a substantial increase in contingent resources for Pandion Energy given we only recently prequalified as a licensee on the Norwegian continental shelf. The Cara discovery is our first development and a good example of the type of investment opportunities we are targeting through exploration as well as when evaluating farm-in opportunities in development projects and producing assets. The foundation for our growth has been further strengthened.”

 

Licence partners in PL636: Partners in PL636 are: ENGIE E&P (30%, Operator), Idemitsu Petroleum (30%), Pandion Energy (20%) and Wellesley Petroleum (20%)

* In Norwegian terminology: BoK/Beslutning om konkretisering.

Dr. Alan Parsley has been appointed as new Chairman of the Board of Directors of Pandion Energy AS (“Pandion Energy”). Parsley comes to Pandion Energy with over 45 years’ experience in the oil and gas industry, predominantly at Shell, where he held senior positions including Global Head of Exploration and Head of New Business Ventures, Chief Executive of Shell Syria and Chairman of Shell Australia. Parsley is currently an Executive Board Member of Kerogen Capital, and a Non-executive Director of Buried Hill Energy and Chair of Zennor Petroleum, both of which are Kerogen’s portfolio companies. He also formerly served as a member of the Board of Woodside Petroleum Ltd.

Alan Parsley has replaced Jason Cheng, who will continue to serve as a Board member of Pandion Energy.

Parsley graduated from the University of Edinburgh and holds a BSc and a PhD in Geology. He was a member of the Court of Heriot-Watt University from 2005 to 2011.

Pandion Energy has had an excellent start on the NCS, which underpins the skillset and the experience of the team. The company has an established portfolio of licenses, and has recently submitted their first APA applications on September 1.

“Pandion Energy has had an excellent start on the NCS, which underpins the skillset and the experience of the team. The company has an established portfolio of licenses, and has recently submitted their first APA applications on September 1. We see great potential on the NCS and are currently evaluating several prospects for further growth”, says Parsley.

Pandion Energy, founded in November 2016, is a private oil and gas company focusing on exploration, appraisal and development opportunities on the Norwegian continental shelf.

Pandion Energy AS (“Pandion Energy”) is pleased to announce that the company has been pre-qualified as licensee on the Norwegian Continental Shelf (“NCS”) and received an approval for the acquisition of all licences in Tullow Oil Norge AS’ existing portfolio including a 20% interest in PL 636 containing the Cara oil and gas discovery. Cara is an attractive discovery located just 6 km northeast of the existing Gjøa infrastructure in the Norwegian North Sea.

“The pre-qualification of Pandion Energy and completion of the transaction with Tullow Oil Norge AS is an important milestone for the company, demonstrating the quality of our organisation and operational platform. Since founding the company in November last year, we have built up a pipeline of investment opportunities spanning from exploration assets to development projects. With all required approvals in place, we are now ready to capture these opportunities through acquisitions, farm-ins and licensing rounds”, says Jan Christian Ellefsen, CEO of Pandion Energy.

The pre-qualification of Pandion Energy and completion of the transaction with Tullow Oil Norge AS is an important milestone for the company, demonstrating the quality of our organisation and operational platform.

Pandion Energy, founded in November 2016, is a private oil and gas company focusing on exploration, appraisal and development opportunities in all parts of the NCS.

The Pandion Energy team has a long track record of technical, commercial and financial success on the NCS, having worked together for almost 10 years at Tullow Oil Norge and its predecessor, Spring Energy. Backed by Kerogen Capital, an international private equity fund manager specialising in the international oil and gas sector, Pandion has a solid foundation for creating value on the NCS.

Kerogen Capital is pleased to announce it has made an initial commitment of US$100 million to Pandion Energy AS (“Pandion Energy” or the “Company”), an exploration and production company focused on the Norwegian Continental Shelf (“NCS”). Pandion Energy will pursue exploration, appraisal and development opportunities on the NCS via acquisitions, farm-ins and licensing rounds. Kerogen, together with its limited partners, may commit up to US$300 million to Pandion Energy as its portfolio develops.

Pandion Energy, headquartered in Oslo, was formed to effect a management buy-out* of Tullow Oil Plc’s Norwegian subsidiary, Tullow Oil Norge AS. Kerogen will become its majority shareholder alongside the Pandion Energy management team. Pandion Energy’s strategy is focused on participating in discoveries with resource upside and enhancing their value through appraisal drilling, near field exploration and moving the assets up the development curve.

Pandion Energy’s strategy is focused on participating in discoveries with resource upside and enhancing their value through appraisal drilling, near field exploration and moving the assets up the development curve.

Proceeds from Kerogen’s investment will be used to build-out Pandion Energy’s portfolio, including funding the acquisition of all licences in Tullow Oil Norge AS’ existing portfolio*, as well as its operational platform. This transaction remains subject to approval from the Norwegian Ministry of Petroleum and Energy, and to the pre-qualification of Pandion Energy as a licensee on the Norwegian Continental Shelf.

The initial portfolio includes a 20% interest in the Cara discovery made in September 2016 in PL 636. Cara is an attractive low breakeven oil and gas discovery with a preliminary mean resource estimate of approximately 50 mmboe located just 6km northeast of the existing Gjøa infrastructure in the North Sea.

The Pandion Energy management team has a long track record of technical, commercial and financial success in the NCS, having worked together for almost 10 years at Tullow Oil Norge AS and its predecessor, Spring Energy Norway AS, which was acquired by Tullow Oil Plc in 2013. The senior management team of Pandion Energy includes: Jan Christian Ellefsen, CEO; Bente Flakstad Vold, VP Exploration and Appraisal and Kjetil Steen, VP Development and Production. Helge Larssen Nordtorp, Deputy CEO and VP Business Development, and Hege Peters, VP Finance and Business Support, will be joining Pandion Energy management team upon transaction completion after fulfilling their current commitments to Tullow Oil Norge AS. Further detail is provided below.

Kerogen’s Co-Founder and Managing Partner, Jason Cheng, commented:
 “We are excited to partner with the highly experienced Pandion Energy management team to develop the Cara discovery and to capitalise on the many attractive opportunities we currently see in Norway. Kerogen remains attracted to the North Sea given recent market dynamics, combining attractive pricing for assets, substantial reductions in operating cost structures and Norway’s low risk stable fiscal environment.”

 Pandion Energy’s CEO, Jan Christian Ellefsen, commented:
“Following a period of reduced investment, we see a compelling case for the Norwegian Continental Shelf. With Kerogen as a partner, we are now able to mature our portfolio while acting swiftly on attractive opportunities in the asset market. Having worked close to 10 years together, I have great confidence in the Pandion Energy team and its ability to deliver on its objectives. We look forward to the journey that lies ahead.”

Profile of the Management Team

• Jan Christian Ellefsen (CEO) leads the Pandion Energy management team with 27 years of managerial, commercial and technical experience in oil and gas industry. Jan Christian joined Spring Energy just after the start-up and has, since May 2015, been responsible for all Tullow’s activities in Norway as Managing Director of Tullow Oil Norge AS. He has a background from both oil services and E&P companies, mainly within development and operations.
• Helge Larssen Nordtorp (Deputy CEO and VP Business Development) joined Tullow Oil Norge AS in 2015. Previously a Director of DNB Markets, a leading Norwegian investment bank, with 18 years of experience spanning capital market transactions, M&A and business development projects focused on oil and gas in Norway. Previously he was with the Norwegian Ministry of Petroleum and Energy.
• Bente Flakstad Vold (VP Exploration and Appraisal) previously responsible for all exploration activities and portfolio management at Tullow Oil Norge AS. She has 19 years of experience in oil and gas exploration and geophysics focusing on the North Sea, Norwegian Sea and Barents Sea. Prior to Tullow and Spring Energy, she worked for DNO and RWE Dea.
• Kjetil Steen (VP Development and Production) was team leader for Field Development at Tullow Oil Norge AS. He has 21 years of experience with developments on the NCS and West Africa, in particular taking discoveries to Final Investment Decision with focus on technical feasibility, concept selection, and engineering design through to execution.
• Hege Peters (VP Finance and Business Support) had overall management responsibility for accounting and financial control at Tullow Oil Norge AS. She has 22 years of experience from a variety of finance functions, managing accounting, budgeting, liquidity, tax and compliance processes. She initially qualified at Arthur Andersen as a Senior Auditor.

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* Includes assignment of participating interests in the following licences on the Norwegian Continental Shelf: PL 636 (Cara discovery), PL 651, PL 689, PL 746 S, PL 750, PL 750 B, PL 774, PL 774 B, PL 776, PL 786, PL 791 and PL 826.