Lundin to acquire Barents Sea portfolio from Idemitsu Petroleum Norge

Lundin Energy AB subsidiary Lundin Energy Norway AS agreed to acquire from Idemitsu Petroleum Norge AS (IPN) interests in a portfolio of Barents Sea licenses, including a 10% working interest in the Wisting oil discovery and a further 15% working interest in the Alta oil discovery.

The Wisting discovery, in licenses PL537 and PL537B with estimated gross resources of 500 million bbl of oil, is scheduled to be one of the next Barents Sea production hubs. Equinor, as operator of the development phase, is targeting a PDO by end 2022 to benefit from temporary tax incentives (OGJ Online, Dec. 2, 2019).

With the deal, Lundin would increase its interest holding as operator of licenses PL609, PL609B, and PL609D, containing the Alta discovery, to 55% from 40%. Acceleration of Alta development to benefit from tax incentives is being assessed (OGJ Online, Sept. 25, 2018).

Additionally, Lundin Energy increases its working interests in licenses PL609C and PL851, raising the company’s working interest in the operated Polmak exploration well to 47.5% from 40%. Polmak is the first of three high impact exploration prospects to be drilled by the company in the Barents Sea during fourth-quarter 2020, which are targeting gross unrisked prospective resources of over 800 million bbl of oil. Polmak will be drilled by the West Bollsta semi-submersible drilling rig, with spud expected in early October 2020.

The deal, with an effective date of January 2020, adds estimated net contingent resources of 70 MMboe for a cash consideration of $125 million, and is subject to approval of the board of Idemitsu Kosan Co. Ltd. (the parent company of IPN) and Norwegian regulatory approvals.