The Oil Council's recent World Energy Capital assembly in London shone a light on the new generation of smaller companies from disparate backgrounds now beginning to make their presence felt on the international exploration and production stage. Meg Chesshyre looks at the provenance and prospects of two of them, Dyas E&P and Panoro Energy.
Dyas E&P grew explosively during the 2008/09 credit crunch, more or less doubling the company, managing director Peter Veenhof told attendees at November's Oil Council gathering.
Dyas had actually been around for quite a while, having been founded in 1963 as a wholly owned subsidiary of the Netherlands' largest privately owned conglomerate, SHV Holdings (Steenkolen Handels Vereeniging – or Coal Trading Association), which started off in 1896 distributing coal from Germany into the Netherlands. But it was two substantial acquisitions in 2009 – from Oranje Nassau and Ithaca Energy – that really gave notice of Dyas' heightened aspirations as a North Sea E&P player.
These purchases were made possible through intercompany loans, SHV having just sold a large scrap metal business in the UK. The Oranje Nassau deal (18mmboe) resulted in an increased stake in the prolific Nexen-operated Buzzard field, and perhaps more importantly in the Golden Eagle/Hobby area as well, which is currently being developed. Dyas had acquired its initial stake in Buzzard in 2005 through Edinburgh Oil & Gas (22mmboe).
With Ithaca, Dyas first took an equity position (11mmboe), then extended a loan, then cancelled the loan for a further equity position (13mmboe). This gave the company stakes in Beatrice/ Jacky, Athena, Stella, Carna. 'In my view it was a real winwin,' commented Veenhof, who joined the family-owned company from Wintershall Noordzee in 2007 as new ventures manager. 'It gave us a material equity position in those assets, and made Ithaca debt-free, which allowed them to keep the team together and to deliver on the promises they had made with respect to their remaining asset base.'
Beatrice and Jacky are both producing for Ithaca, and there are a number of infield projects on-going. 'This year, in 2010, Beatrice has been the real money spinner for both our companies,' declared Veenhof. A project sanction decision has also been taken for the Athena field, which is being developed with a modified FPSO from BW Offshore, while the intention is to come up with a development proposal for the Stella field in 2011.
Dyas is an active partner, as non-operator, in something like 70 to 80 oil and gas exploration, development and production joint ventures spread out over the UK and the Netherlands, with one onshore Colombia. It also has a stake in the Taqa-operated Alkmaar peak shaving asset. Its net UK and Dutch developed reserves are some 66mmboe and daily production this year has been 9.5mmboe. Its aim is to grow these production levels, by participating in auctions, focused strategic alliances and diversifying its reserves base outside the North Sea arena.
'We drill typically 10-15 exploration and appraisal wells in any given year, but the majority of the expenses go into development capex production and operations,' explained Veenhof. 'Our niche really sits in the so-called small fields both onshore and offshore.' He described it as 'a very robust portfolio'.
Veenhof said that Dyas was going to embark on a Dutch gas divestment programme in 2011, where it would be selling a number of producing fields in Holland, via brokers Ernst and Young. The assets still held good reserves, but they required a high amount of attention, and Dyas only had a small team of 15 people. 'They are better placed in the hands of a company with a small market cap, which could use the production to go on to the next stage of growth for them,' he explained.
Veenhof stressed that Dyas has a reputation for being a good constructive partner. 'If you have a Dyas asset manager in your venture he would be fully authorised to say yes to any proposal,' he said, adding: 'In terms of geography we see the North Sea as being core for a long time. Relative to our size the deal flow is high and the opportunity conveyor belt is filled enough for us to make our deals, but we have also recognised that sooner or later we will have to diversify, either geographically, going to another continent, or in terms of resource, perhaps into unconventionals.'
Brazilian backbone
The growth plans of Panoro Energy, a newcomer to the international independent oil and gas company ranks but with some wellknown industry names at its helm, were outlined at the World Energy Capital conference by CEO Kjetil Solbraekke.
Created by Pan-Petroleum's 29 June 2010 merger with Norse Energy's former Brazilian business, Panoro Energy has offices in Oslo, London and Rio de Janeiro and a portfolio of production, development and exploration assets in Brazil and West Africa.
The backbone of the company, providing solid production and cashflow, is its 10% stake in the Petrobrasoperated Manati field offshore Brazil. Other key growth centres the company anticipates going forward are the Petrobras-operated BS-3 area offshore Brazil and the SNPC (Congo National Oil Company)-operated MKB (Mengo-Kundji-Bindi) development onshore Congo- Brazzaville, in which Panoro has a 20% stake. A positive MKB production test was reported in Panoro's last quarter results. The company also has exploration plans coming up both offshore Brazil and with operator Harvest Natural Resources on the Dussafu Marin block offshore Gabon (Panoro 33%).
Manati, which came onstream in January 2007, is Brazil's largest non-associated gas field in production and is estimated to hold about 1tcf of gas. It is located in the Camamu Almada basin, 40km south-southwest of Salvador and 7km offshore. Operator Petrobras has 35% and Panoro 10%; the other partners are Queiroz Galvão (45%) and Brasoil (10%). Panoro has a long term take or pay contract with Petrobras, and discussions are under way within the licence to secure a contract for the noncontracted volumes.
Petrobras is expected this month to submit new development plans for Brazil's BS-3 area, a joint development of the CavaloMarinho, Estrela do Mar, Coral and Caravela discoveries. The development concept includes a FPSO with gas pipeline to an onshore gas processing plant. The partnership is currently evaluating the development concept, including tying in additional fields to enhance economics. The final concept selection is expected to take place in the third quarter of 2011. Panoro's current working interest in the BS-3 fields ranges from 35-65%.
Panoro has set up an ongoing farm-out process and data room for its offshore Brazil ninth round exploration blocks SM-1035, SM-1036 and SM-1100. Stellar Energy was appointed as advisor in October 2010. The target is to find a partner or partners to commit to drilling a well on each of the exploration licences.
'I do think we have a very experienced and diversified team, which is well suited for the portfolio,' commented Solbraekke, who himself was previously with the Norwegian Energy Ministry, Norsk Hydro and Statoil Hydro, before running Norse Energy's Brazilian operations. Dr Phil Vingoe, Panoro's non-executive chairman, whose early working career was with BP, led the creation of Pan-Petroleum and was instrumental in the merger that established Panoro Energy.
Panoro's chief financial officer, Anders Kapstad, was CFO at Norse Energy until the demerger. Nishant Dighe, COO, co-founded Pan-Petroleum with Vingoe. And Thor Tangen (pictured), the company's EVP, field development, is a very familiar face from earlier North Sea days with Hydro. OE