MOL Group adds to North Sea assets

Jun 30, 2014

Premier Oil has sold interest in six Central North Sea offshore licenses to Hungary’s MOL Group for US$130 million, the duo announced on 30 June 2014.

The sale includes non-operated equity stakes in the Nexen-operated Scott (21.84%), Rochelle (15%) and Telford (1.59%) fields, as well as participating interest in further exploration licenses such as the Rochelle Upper Jurassic deep prospect. Year to date production from the three fields averaged approximately 3700boe/d net to Premier. Peak production is expected to reach 6200boe/d by 2016, MOL Group said.

Scott, Telford, and Rochelle are tied to the Scott platform, located 186km northeast of Aberdeen. Oil is exported through the Forties pipeline, and natural gas is exported through the Sage pipeline. Nexen operates Scott, Telford, and Rochelle (41.88%, 80.40%, and 41%, respectively). Houston-based Endeavour International Corp. holds the remaining 44% on the Rochelle license.

As previously reported by OE, MOL Group has been planning a North Sea expansion with aims to double its production over the next five years. The company expects its overall UK peak production to reach 20,000-22,000boe/d by 2018.

The deal, MOL Group said, will increase the company’s 2P Reserves by 14.3MMboe, with Scott, Telford, and Rochelle accounting for 9.3MMboe, 4.4MMboe, 0.5MMboe, respectively. “Besides the reserves, further prospective resources of 7MMboe, unrisked, provide additional upside potential,” the company said.

Under the terms of the deal, which is still subject to government approvals, MOL will assume the liabilities for future abandonment costs.

New Premier CEO Tony Durrant, whose appointment was just announced on 25 June, said the sale will allow the company to maintain focus on its Solan and Catcher developments.

Premier operates the Catcher field with 50% interest along with partner Cairn Energy (30%). MOL Group picked up 20% stake in the field back in March. First oil from the field is expected by mid-2017. Premier says the project will produce 96MMbo with a peak production of 50,000b/d. Scope of work includes drilling 22 subsea wells on the Catcher, Varadero, and Burgman fields, which will then be tied back to an FPSO, leased through BW Offshore.

MOL’s Group Executive Vice President for Upstream, Alexander Dodds, said of the sale: “Building on our already existing assets in the UK North Sea, this acquisition represents a significant step forward in growing a solid sizable North Sea portfolio. I am certain that these assets are of considerable quality and will bring further positive results. The synergies gained with this transaction will complement MOL‘s ambitions, and help realize the company’s vision of considerable growth of its international portfolio.”

In March, MOL Group and Germany’s Wintershall closed $375 million deal whereby MOL Group picked up 14 licenses in the North Sea, including non-operated equity stakes in the Catcher field, Broom (29%), Cladhan (33.5%) and Scolty/Crathes (50%) developments. MOL also bought Wintershall’s equity share in existing infrastructure on the Sullom Voe Terminal and the Brent Pipeline System.

Image: Scott platform/Nexen