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OKEA ASA has made an oil discovery at the Brage Field in the northern part of the North Sea, located eight miles (13 kilometers) north of the Brasse field.
Between 0.2 million and 0.5 million standard cubic meters of recoverable oil was proven in connection with drilling well 31/4-A 13 E, of which OKEA is the operator, the Norwegian Petroleum Directorate said in a news release Thursday. Based on data collected during the drilling operation, a decision was made to drill a horizontal sidetrack. The well encountered the Sognefjord Formation at 7044 feet (2147 meters) below sea level and proved oil in a sandstone layer of approximately 32.8 feet (10 meters) in reservoir rocks with moderate to good reservoir quality. The oil/water contact was not encountered, the government agency reported.
OKEA also drilled production well 31/4-A-13 D in the southern part of the Brage field and extended to reach exploration targets in two different reservoirs. The exploration targets were in the Sognefjord and Fensfjord Formation, and both were dry, the agency said.
Wells 31/4-A 13 E and 31/4-A-13 D were drilled from the platform on the Brage field, which has been producing since 1993. The field was proven in 1980 in reservoir rocks in the Statfjord and Brent Group and the Fensfjord and Sognefjord Formation, according to the release.
The Brage field is developed utilizing an integrated production, drilling, and living quarters facility with a steel jacket. The oil is transported by pipeline to the Oseberg field and onward in the Oseberg Transport System (OTS) pipeline to the Sture terminal. A gas pipeline is connected to the Statpipe pipeline system, the release said.
Third Quarter Results
Meanwhile, OKEA posted an operating income of $190 million (NOK 2.1 billion) for the third quarter, compared to $150 million (NOK 1.71 billion) in the previous quarter. The company’s EBITDA for the quarter was $120 million (NOK 1.34 billion), compared to $100 million (NOK 1.17 billion) in the previous quarter, according to the company’s earnings release Thursday.
Net production to OKEA in the third quarter was reported at 23,710 barrels of oil equivalent per day (boepd), compared to 22,263 boepd in the previous quarter. Brage delivered production over expectations, while Draugen, Gjoa, Ivar Aasen, and Nova produced according to plan in the quarter, the company noted, adding that technical issues at Yme resulted in reduced production in July.
The company reported third-quarter sales volume of 26,689 boepd, compared to 22,782 boepd in the previous quarter. OKEA attributed the increase mainly to the high volumes lifted from Draugen, Brage, Ivar Aasen, and Nova.
OKEA announced an impairment charge of $42.5 million (NOK 475 million) on the Yme asset, mainly driven by a downward revision of reserves and partially offset by increased forward prices for oil.
“Production performance in the quarter was good, particularly on our operated assets”, OKEA CEO Svein Liknes said. “In combination with increased liquids prices, this resulted in solid total operating income and EBITDA. However, the reduction in reserve estimates for the Yme field caused an impairment of NOK 475 million which reduced net profit after tax by NOK 104 million to NOK 32 million for the quarter”.
“We successfully completed a refinancing in September which extended the maturity of the outstanding bond debt and added financial flexibility through a revolving credit facility. Our growth journey continues with the acquisition of 28 percent WI [working interest] in the Statfjord Area from Equinor progressing towards completion in November as well as the start of production of the Hasselmus gas field in October”, Liknes concluded.
To contact the author, email rocky.teodoro@rigzone.com
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