[Norway] Brage

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escveritas
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[Norway] Brage

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STATUS

Brage has been producing for a long time, and work is still ongoing to find new ways of increasing recovery from the field. New wells are being drilled.

DEVELOPMENT

Brage is a field in the northern part of the North Sea, ten kilometres east of the Oseberg field. The water depth is 140 metres. Brage was discovered in 1980, and the plan for development and operation (PDO) was approved in 1990. The field has been developed with an integrated production, drilling and accommodation facility with a steel jacket. Production started in 1993. A PDO for Brage Sognefjord was approved in 1998. The authorities granted PDO exemptions for the Brent Ness and Bowmore Brent deposits in 2004 and 2007, respectively.

RESERVOIR

Brage produces oil from sandstone of Early Jurassic age in the Statfjord Group, and sandstone of Middle Jurassic age in the Brent Group and the Fensfjord Formation. There is also oil and gas in Upper Jurassic sandstone in the Sognefjord Formation. The reservoirs lie at a depth of 2,000-2,300 metres. The reservoir quality varies from poor to excellent.

RECOVERY

The recovery strategy in Statfjord and Fensfjord is water injection. In the Brent Group, the production strategy is water alternating gas (WAG) injection, and the Sognefjord Formation is produced by depletion and by pressure support from the aquifer.

TRANSPORT

The oil is transported by pipeline to the Oseberg field and further through the Oseberg Transport System (OTS) pipeline to the Sture terminal. A gas pipeline is tied-back to Statpipe.
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Re: [Norway] Brage

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Rex International Holding Limited, a Singaporean Oil and Gas player through its 90% owned subsidiary Lime Petroleum AS has acquired 33.8% of Norway's Brage oil field and the five licences on the Norwegian Continental Shelf over which the Brage field straddles, from Repsol for a sum of USD 42.6 Million under a conditional sale and purchase agreement.

The Company believes that the economics from the current production reserve base in the Brage Field are robust, and there is further upside from future in-fill drilling for production and exploration drilling of high value near-field prospects that are expected to add further production to the Brage Field.

Brage is a field in the northern part of the North Sea, ten kilometres east of the Oseberg field. The water depth is 140 metres. Brage was discovered in 1980, and the plan for development and operation (PDO) was approved in 1990. The field has been developed with an integrated production, drilling and accommodation facility with a steel jacket. Production started in 1993.

Brage produces oil from sandstone of Early Jurassic age in the Statfjord Group, and sandstone of Middle Jurassic age in the Brent Group and the Fensfjord Formation.

The oil is transported by pipeline to the Oseberg field and further through the Oseberg Transport System (OTS) pipeline to the Sture terminal. A gas pipeline is tied-back to Statpipe.
escveritas
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Re: [Norway] Brage

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Update on Brage Field Transaction Financial Impact

• Acquisition of the producing Brage Field was completed on 31 December 2021, with a retrospective right to all production from 1 January 2021
• The Group recorded the transaction as gain from bargain purchase of US$18.2 million by way of accounting treatment as business combination
• Had the transaction been completed on 1 January 2021, total revenue for the financial year 2021 would have been approximately US$76.5 million higher and EBITDA would have been approximately US$32.7 million higher, before gain from bargain purchase
• Brage Field produced 1.06 MMBOE net to LPA in FY2021
• Average realised sales price net to LPA of around US$72/BOE in 2021; current price of Brent is over US$120/barrel

SINGAPORE, 9 March 2022 – Rex International Holding Limited (“Rex International Holding”, “Rex” or the “Company”, and together with its subsidiaries, the “Group”), a multinational oil and gas exploration and production company, wishes to clarify the financial impact of its 91.65 per cent subsidiary Lime Petroleum AS’s (“LPA”) acquisition of a 33.8434 per cent interest in the producing Brage Field, which was completed on 31 December 2021.

On 15 June 2021, LPA entered into a conditional sale and purchase agreement with Repsol Norge AS (“Repsol”), to acquire Repsol’s 33.8434 per cent interests in the oil, gas and natural gas liquids (NGL) producing Brage Field on the Norwegian Continental Shelf for a post-tax consideration of US$42.6 million.

The acquisition of the Brage Field did not contribute to any income or profit before tax in the Group’s financial year ended 31 December 2021 (“FY2021”), but was recognised as a “gain from bargain purchase” of US$18.2 million in terms of accounting treatment, as the acquisition was completed on 31 December 2021.

Based on Norwegian Petroleum Directorate’s website, production in the Brage Field in 2021 amounted to gross 3.14* MMBOE. Using production of 1.06 MMBOE net to LPA based on LPA’s interests in Brage Field, preliminary estimates of the financial impact from the transaction show that if the acquisition had been completed at the beginning of 2021, total revenue for FY2021 would have been approximately NOK 657.8 million (approximately US$76.5 million i.e. at average realised sales price of US$72/BOE) higher and EBITDA would have been approximately NOK 280.6 million (approximately US$32.7 million) higher, before gain from bargain purchase.

Dan Broström, Executive Chairman of Rex, said, “Since the release of our annual accounts for the financial year 2021, we have fielded many questions regarding the financial impact of the Brage transaction. Due to the transaction being regarded as a business combination, the revenue, EBITDA and profit are not normally recognised in our books, but resulted in a bargain purchase gain, even though we have a right to the underlying cash-flow from the transaction from 1 January 2021. From this year 2022, revenue from the Brage Field will be fully recognised in our profit and loss statement and will make an important contribution. The estimated average oil price in 2021 for production from the Brage Field was around US$72 per barrel of oil equivalent. This should be compared to the price of Brent today trading at over US$120 a barrel. This bodes well for a strong start to 2022 as we now have two production legs to stand on - Norway and Oman. In summary, the purchase of the Brage Field has been very accretive to the Group to date.”
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Re: [Norway] Brage

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Brage Field Production Update – August 2022
07.09.2022

Lime Petroleum AS (“LPA”) today announced that oil production in August 2022 from the Brage Field in Norway, net to LPA, amounted to 2,742 barrels of oil equivalent per day (boepd).

The platform was shut down at midnight on 2 September 2022 for scheduled inspections, maintenance and modification activities. Production is expected to be back online on 24 September 2022.

LPA holds a 33.8434 per cent interest in the Brage Field. The operator of the Brage Field is Wintershall Dea Norge AS.
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