Dana agrees to purchase North Sea fields

Dana Petroleum has agreed to a second major transfer of North Sea interests from Petro-Canada, a subsidiary of Suncor Energy.

Offshore staff

ABERDEEN, UK -- Dana Petroleum has agreed to a second major transfer of North Sea interests from Petro-Canada, a subsidiary of Suncor Energy.

Earlier this summer, Dana bought Petro-Canada’s production and exploration interests in various gas and oil fields in the Dutch sector. Under the latest proposed transaction, it will pay a further $372 million in cash for Petro-Canada’s UK assets, which comprise two main production hubs. These are various operated fields around the Triton area of the central North Sea, and participating interests in the Scott/Telford fields in the Outer Moray Firth area. The package also includes prospective exploration acreage in the Inner Moray Firth.

Dana says the acquisition will bring it a further 33.5 MMboe of proven and probable reserves and 44.3 MMboe of proven, probable, and possible reserves, with a total value estimated by independent analyst Senergy (GB) at $1.4 billion.

On completion of the deal, Dana should net additional production of around 20,000 boe/d, lifting the company’s daily output to around 70,000 boe/d by year-end. Its portfolio of producing fields will rise from 55 to 63, with further opportunities to enhance production via infill drilling and other optimization measures.

The Triton area comprises blocks 21/24a, 21/29a, 21/29b, 21/25, 21/30 21/23, 29/1a, and 29/1b, and includes five Petro-Canada operated fields – Guillemot West and Northwest, Clapham, Saxon, and Pict – and a 4.67% stake in the Shell-operated Bittern.

All these fields tieback subsea to the Hess-operated Triton FPSO, in which Petro-Canada UK has a 33.11% interest. Oil is offloaded from the FPSO via shuttle tankers, with produced gas exported through the Fulmar Gas pipeline to St. Fergus, north of Aberdeen.

There is potential to lift production through de-bottlenecking of the FPSO facilities, improving throughput from the Guillemot area fields, and tie-ins of nearby third party field developments, says Dana. There are also infill drilling opportunities in the Guillemot West, Northwest, and Bittern fields.

The Scott/Telford Area is operated by Nexen. The Scott field (Petro-Canada 20.64%), in blocks 15/21a and 15/22b, has been developed with two bridge-linked platforms, with oil exported via the Forties Pipeline System and gas through the SAGE system to St. Fergus.

Telford (Petro-Canada 9.43%) is 10 km (6.2 mi) south of Scott, in the same two blocks, and has been developed as a subsea tieback to the Scott production platform. Dana says a recent well in the east part of the field revealed significant further potential.

Production is due to re-start shortly from both fields following a shut-in on July 12 caused by the failure of an actuator on a valve at the BP-operated Forties Unity Platform, which ties output from Scott into the Forties Pipeline System.

Dana says there is potential to develop more oil in nearby blocks 15/18a and 15/28b, via existing discoveries and exploration prospects, with further scope for third party business across the Scott platform.

Finally, Petro-Canada’s interests in the Inner Moray Firth Exploration Area center in quadrants 12 and 13, 50 km (31 mi) from St. Fergus and 25 km (15.5 mi) from the Chevon-operated Captain field. Discoveries include the Surprise, Nutmeg, and Dee oil fields.

09/08/2010

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