The appetite for asset acquisitions has clearly not gone away since NEO Energy announced the deal to take over the majority of Exxon UK’s assets last month and the acquisition of Total Central North Sea assets in 2020.
Yesterday, private equity investor HitecVision, who is also backing NEO Energy, announced the acquisition of Zennor Petroleum from Kerogen Capital for a total consideration of up to $625 million.
Following this transaction, NEO’s production is estimated to grow from circa 80,000 barrels of oil equivalent per day (boepd) in 2021 to a stable production base in the period 2022 – 2026 of between 90,000 and 100,000 boepd.
Zennor
With a shared history at company Arco, the Zennor Petroleum management team successfully built up the company into an independent UK based oil and gas business engaged in the exploration, appraisal, development and production of hydrocarbons on the UKCS. Zennor’s assets are located across the Central, Northern and Southern North Sea and its current production is around 5,000 boepd.
Until the deal was announced yesterday, Zennor’s portfolio of approximately 40 MMboe of net 2P reserves and more than 90 MMboe of net 2C resources comprised non-operated interests in the Mungo & Monan, Britannia, Bacchus and Cormorant East producing fields, a 100% operated interest in its flagship Finlaggan development project and interests in several near-field discoveries. Net production from these assets is expected to exceed 20,000 boepd in Q4 2021, once Finlaggan is onstream.
Finlaggan development
The Finlaggan development is the most important asset of the company. It is located in the Central North Sea, close to existing fields such as Britannia (see map above). A little more than a year ago, Peter O’Mara, geological advisor at Zennor, gave a presentation on the Finlaggan development for PESGB members in Aberdeen.
The field, which consists of a series of Lower Cretaceous turbidite sands, is a stratigraphic trap with the reservoir sands onlapping against the Rattray High in the west. Although pressure depletion has been observed through production at Britannia – with the best reservoirs being most depleted – Peter showed that the field is capable of producing around 30 MMboe of gas condensate reserves.
Finlaggan gas condensate will be produced through two wells (F1 and F2) that have been drilled already, and first production is targeted for Q4 this year.
Appraisal and exploration opportunities
Apart from the Finlaggan licence, Zennor is the operator or partner in a series of blocks around the Britannia field. As Peter O’Mara explained in January last year, the company has identified follow-up prospectivity in the area, which is also reflected by the fact that the manifold that was installed next to the Finlaggan production wells provides tie-in points for additional wells and fields.
HENK KOMBRINK
