Lime Petroleum AS in Norwegian Sea License Swap

Source: 4/7/2021, Location: Europe

- 20 per cent interests in PL263D/E/F Sierra (previously known as Apollonia) to be swapped with 13.3 per cent interest in well-defined PL433 Fogelberg discovery
- Field development with production start-up possible in 2025
- Significant addition of 6.5 mmboe contingent resources net to LPA’s portfolio

Rex International Holding Limited, a technology-driven oil company, is pleased to announce that its 90 per cent subsidiary Lime Petroleum AS (“LPA”) has on 6 April 2021, signed an agreement with ONE-Dyas Norge AS (“ONE-Dyas”) to swap its 20 per cent interests in each of the licences PL263D, PL263E, and PL263F Sierra (previously known as Apollonia) in the Norwegian Sea for ONE-Dyas’ 13.3 per cent interest in PL433 Fogelberg. LPA has agreed to pay ONE-Dyas a contingent cash consideration, which is related to the Plan for Development and Operations (PDO). The transfer of the interests is pending regulatory approval. An announcement will be made upon completion of the transfer of the interests.

Mr Dan Broström, Executive Chairman of Rex International Holding, said, “Our strategy in Norway has been to participate in infrastructure-led exploration and to create value by moving resultant discoveries towards production. We have realised this strategy with our participation in the PL338C Rolvsnes discovery and its subsequent monetisation with related assets for US$45 million in 2019. This licence swap is an extension of this strategy, as it allows LPA to trade the PL263D/E/F Sierra discovery for another discovery asset that is closer to production and hence, has lower exploration risk.”

The licences PL263D, PL263E, and PL263F Sierra are located on the Halten Terrace in the Norwegian Sea. LPA participated in the drilling of the Apollonia well in the fall of 2020, which resulted in the Sierra South gas discovery in Cretaceous Lange Formation sandstones. The Norwegian Petroleum Directorate (NPD) reports that the discovery is estimated to contain some 5 mmboe gas in reserveclass 7F (Production Not Evaluated). In addition, significant prospective resources have been identified. Equinor is the operator of the licences, and Pandion Energy AS and ONE-Dyas are partner companies.

The PL433 licence is located on the Halten Terrace, just north of the large Åsgard field. The licence contains the Fogelberg discovery, which as reported by the NPD, is estimated to contain 49 mmboe gas/condensate in reserve-class 4F (Production in Clarification Phase). The discovery is well-defined with three wells and a production test, in addition to high quality 3D seismic. The reservoir is in the prolific Jurassic Garn Formation, which is producing from the nearby Åsgard field. The PL433 partnership is moving the discovery towards production with the submission of a PDO likely in end2022, and production start-up potentially in 2025. The licence is operated by Spirit Energy Norway AS, with partner companies PGNiG Upstream Norway AS and DNO Norge AS.

Mr Lars Hübert, Chief Executive Officer of LPA, said, “The Halten Terrace continues to gain importance to LPA, as we move the company closer to production. The swap with ONE-Dyas enables us to get into production sooner and reduce exploration risk. Development work on Fogelberg will run in parallel with the PL838 Shrek and PL1125 Falk/Linerle developments, which the company is also working on.”

LPA will work closely with the operator and partners on the licence to bring the Fogelberg discovery into production. Furthermore, LPA will continue to actively utilise the Rex Virtual Drilling technology for further evaluation of the licence area.

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