Lundin Energy Acquires Barents Sea Portfolio from Idemitsu
Lundin Energy AB has entered into an agreement with a wholly-owned subsidiary of the Japanese integrated oil company Idemitsu Kosan Company Ltd. to acquire interests in a portfolio of licenses located in the Norwegian Barents Sea, for a total cash consideration of US$125 million. The interests acquired include estimated net contingent resources of approximately 70 million barrels of oil equivalent (MMboe).
Under the terms of the deal, Lundin will acquire a 10% working interest in the Wisting oil discovery, situated in the PL537 and PL537B licenses in the Barents Sea. The discovery is scheduled to be one of the next production hubs in the Barents Sea, and is operated by Equinor ASA, which is targeting a Plan for Development and Operation by 2022. The Wisting oil discovery is estimated to contain gross resources of 500 million barrels of oil (MMbbls).
Lundin will also acquire an additional 15% interest in licenses PL609, PL609B and PL609D, increasing its operated working interest in the Alta oil discovery to 55%. Additionally, the transaction increases Lundin’s operated interests in licenses PL609C and PL851 (containing the Polmak prospect) from 40% to 47.5%.
Upon closing of the transaction, Lundin will immediately commence the program of material exploration wells, and the Polmak exploration well will be the first of three high-impact exploration prospects to be drilled by the company in the Barents Sea during Q4-2020, targeting gross unrisked prospective resources of over 800 MMbbls.
“I am very pleased to announce this strategic acquisition which strengthens Lundin Energy’s position in one of our core exploration areas and provides an interest in a major commercial oil discovery, as well as increasing our working interest in the operated Alta oil discovery,” said Alex Schneiter, Lundin’s CEO.
“With the high impact Polmak well due to spud shortly, I am excited at the opportunity and position we have built in the Barents and look forward to reporting on our progress in the months ahead,” he added.
NASDAQ Stockholm-listed Lundin Energy is a part of the Lundin Group of Companies, an international group which interests across the international mining, oil & gas exploration & production, and renewable energy sectors. In 2017, the company’s predecessor entity, Lundin Petroleum AB spun-off its non-Norwegian producing assets into a newly formed company called International Petroleum Corp. (IPC). Lundin Petroleum changed its name to Lundin Energy earlier this year, in line with its announced decarbonization strategy that includes the introduction of other energy sources into its future business plans.
The transaction is subject to the receipt of approvals from Idemitsu’s board and Norwegian regulatory authorities, and will be effective as of January 1st, 2020.