DNO ASA’s wholly-owned subsidiary DNO Exploration UK Limited is acquiring a 25 percent interest in the Arran field on the United Kingdom (UK) Continental Shelf from ONE-Dyas E&P Limited.
The transaction is expected to add around four million barrels of oil equivalent net to DNO, consisting of 90 percent gas, with projected net 2024 production of 2,000 to 2,500 barrels of oil equivalent per day (boepd).
The cash consideration for the transaction is $70 million, plus a contingent consideration of up to $5 million if certain operational targets are met, DNO said in a statement Tuesday. The effective date of the acquisition is January 1 and the transaction is expected to close in the second quarter of 2024, subject to regulatory approval.
The Arran field started production in 2021 as a subsea tie-back to the Shearwater A platform, both operated by Shell U.K. Limited. Gas from Arran is exported via the Fulmar Gas line on to the St. Fergus Terminal, while liquids are exported to Cruden Bay via the Forties Pipeline System, according to the release.
“Arran fits neatly in our strategy of acquiring bolt-on producing assets as we develop our significant discoveries in Norway”, DNO Managing Director Chris Spencer said. “The company expects financial synergies between Arran and DNO’s existing position in the UK”.
With the transaction, DNO said it continues to expand a North Sea portfolio that includes 14,200 boepd of current production, which comes almost exclusively from fields in Norway. The company expects production to grow as it brings into operation its ongoing development projects, notably Trym Restart, where DNO owns a 50 percent stake and is the operator; Andvare, where it owns 32 percent; and Berling, where it owns 30 percent.
DNO added that its “exceptionally successful” exploration program delivered four additional discoveries and two successful appraisal wells in Norway last year.
Meanwhile, DNO Norge AS secured participation in 14 exploration licenses, of which three are operatorships, under Norway's Awards in Predefined Areas (APA) 2023 licensing round. Of the 14 new licenses, 10 are in the North Sea and four in the Norwegian Sea, according to a separate statement.
Under the latest licensing round, DNO Norge was offered participation in PL 644 D, PL 1102 B, PL 1148 CS, PL 1198, PL 1203, PL 1205, PL 1212, PL 1213, PL 1226, PL 1228, and PL 1229. The company will also operate PL 1204, PL 1209, and PL 1216.
At the end of 2023, DNO held interests in 73 licenses offshore Norway, of which 13 were operated by the company, it noted.
The Norwegian Ministry of Energy offered 62 new production licenses on the Norwegian Continental Shelf in the APA 2023 licensing round, compared to 47 in the previous year.
Awards in Predefined Areas (APA) is an annual exploration round for the most mature areas of the Norwegian Continental Shelf. Of the 62 production licenses offered in APA 2023, 29 are located in the North Sea, 25 in the Norwegian Sea, and eight in the Barents Sea.
A total of 24 oil companies were offered part in one or more of the licenses, and 16 companies were offered one or more operatorships. A binding work program is linked to all the licenses.
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