Offshore staff
SINGAPORE — Jadestone Energy has agreed to acquire BP Developments Australia’s 16.67% interest in the Cossack, Wanaea, Lambert and Hermes oil fields (CWLH) development (the North West Shelf Oil Project) offshore Western Australia.
The transaction includes a cash consideration of $20 million, plus subsequent contingent and decommissioning payments.
Jadestone President and CEO Paul Blakeley said, “This acquisition is another example of our strategy in action, acquiring low-cost barrels at less than US$3/bbl, while establishing an entry position into a very high-quality long-life asset with very low decline rates.
“We believe that over time we can exercise increasing influence and deploy our skills in mid-life oilfield management. In particular, we see material upside potential through infill drilling into reservoirs with very significant oil in place and, together with optimization of operating costs, the life of the producing fields can be extended for several years.
“In the near to mid-term, further interests in the asset may become available, over which we would have pre-emption rights.”
The deal will give Jadestone 10.4 MMbbl and 2,100 bbl/d net production, along with bp’s 16.67% working interest in the CWLH subsea infrastructure and Okha FPSO, and full abandonment liabilities estimated at $82 million.
Plus, the company will pay $41 million upfront into the decommissioning trust fund for the assets followed by two further payments of $20.5 million.
The CWLH oil fields are in production licenses WA-3-L, WA-11-L, WA-13-L and WA-16-L in the North Carnarvon Basin offshore northwest Australia, and they have been developed via 13 subsea wells producing through the Ohka FPSO. This was installed in 2011 above the Wanaea Field, 135 km northwest of Karratha.
Okha has oil processing capacity of 60,000 bbl/d, along with water handling and gas processing/reinjection facilities. Jadestone sees potential through infill drilling into unswept oil compartments of the fields to extend the FPSO’s operation beyond 2031, longer than its originally anticipated design life.
Cossack, Wanaea and Hermes are in production, delivering on average 12,461 bbl/d in 2021.
The fields also produce associated gas, with the partners in the Woodside-operated North West Shelf oil project having the rights to the gas required to fuel the Okha FPSO. The remainder serves as feedstock in the North West Shelf LNG project.
The North West Shelf oil project joint venture partners have waived their pre-emption rights and given consent in principle to the acquisition.
07.28.2022
