DNO buys 7% stake in Jotun field

Uchenna Izundu
International Editor

LONDON, Mar. 17 -- DNO ASA has acquired 70% interest from Lundin Norway AS in Norwegian production license 103B (PL 103B).

Lundin's stake includes 7% unitized interest in the mature Jotun oil and gas field in the Norwegian North Sea. The transaction is effective from Jan. 1.

DNO said it bought the interest because it could develop the adjacent Eitri prospect if it is commercial. Drilling of Eitri using the Bredford Dolphin rig is expected in the third quarter. DNO also agreed with ExxonMobil E&P Norway AS, which operates Jotun, to gain a 25% license interest in PL 027D after drilling the Eitri prospect.

The company said it "sees additional exploration potential in PL 103B and PL 027D and seeks to contribute to further maturation of the area in cooperation with the operator and license partners." It added, "The agreement gives access to an inexpensive production and drilling facility in an area containing exciting exploration acreage."

Jotun began production in 1999, and the Jotun floating production, storage, and offloading vessel is producing oil and gas via 12 development wells. Proven and probable reserves net to Lundin Petroleum in Jotun were 900,000 boe at the start of this year, with no associated contingent resources attributable to the field. It is expected to continue production until 2015.

Jotun is the production facility for the nearby Ringhorne field, which came on stream in mid-2004. Other tie-back operations will delay decommissioning of the infrastructure and sustain Jotun's field life beyond that possible for a stand-alone project.

Jotun is off Norway and the government and other parties in the development need to approve of the transaction before it can be completed.

ExxonMobil has a 45% stake in Jotun and is working with Dana Petroleum with 45% interest and Petoro with 3%.

Contact Uchenna Izundu at [email protected].