Page 10 - NorthAmOil Week 05 2022

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Newfoundland and Labrador not

ruling out Bay du Nord participation

NEWFOUNDLAND THE government of Newfoundland and Labra- subsea components were ongoing. Elsewhere, at
AND LABRADOR dor is not ruling out participating in Equinor’s least one report said a contract had been awarded
Bay du Nord project in the offshore Flemish Pass for the project’s topsides design.
Basin. Meanwhile, a decision from federal Canadian
On February 3, CBC News quoted New- Minister of Environment and Climate Change
foundland and Labrador Minister of Energy Steven Guilbeault on whether the project will
Andrew Parsons as saying the option was there receive environmental approval is anticipated
and no decision had been made on the matter as soon – potentially in March.
yet. This is despite the province’s current finan- Equinor had previously said that an FID is
cial challenges and a report from last year recom- expected in 2022-23, with first oil possible by
mending that Newfoundland and Labrador exits around 2028. And with oil prices strengthening,
its existing oil and gas investments. the company could be encouraged to accelerate
This comes as Equinor, along with its Bay du its schedule and is reportedly hoping to bring
Nord partners Cenovus Energy and BP, appears the start-up date for Bay du Nord forward to
to be moving closer to a final investment decision 2027.
(FID) on the project. Equinor has said that KBR The project is estimated to have a breakeven
and Aker Solutions are carrying out conceptual price of $35 per barrel – well below current Brent
studies for a floating production, storage and prices of around $91 per barrel as of February 3.
offloading (FPSO) vessel for Bay du Nord. CBC Equinor has also said that it intends to make Bay
also cited an Equinor spokesperson as saying du Nord one of the lowest-emissions oil projects
that planning and execution strategies for the in Canada.™

Earthstone to buy Bighorn

Permian for $860mn

PERMIAN BASIN EARTHSTONE Energy announced on January more than quadrupled our daily production
31 that it had agreed to acquire the assets of pri- rate, greatly expanded our Permian Basin acre-
vately owned Bighorn Permian Resources for age footprint and increased our free cash flow
around $860mn. generating capacity by many multiples since
Bighorn’s assets comprise roughly 110,600 year-end 2020,” stated Earthstone’s president and
net acres (448 square km) in the Permian Basin’s CEO, Robert Anderson. “The proximity of the
Midland sub-basin, primarily in Texas’ Reagan Bighorn assets to existing Earthstone operations
and Irion counties. The assets, which are close positions us to create further value by applying
to Earthstone’s existing Midland operations, are our proven operating approach to these assets,
about 98% operated and 99% held by production primarily in the form of reducing operating
(HBP). Output from the properties is reported to costs. The addition of the high cash flow pro-
have been about 42,400 barrels of oil equivalent ducing assets from Bighorn to the strong drilling
per day (boepd) during November 2021, with oil inventory of Earthstone, including the Chisholm
accounting for around 25% of this and liquids acquisition, furthers Earthstone’s transforma-
comprising roughly 57%. tion into a larger-scaled, low-cost producer with
The transaction is the latest in a series for lower reinvestment in order to maintain com-
Earthstone, which closed four acquisitions in bined production levels.”
2021 and has a further one – its acquisition Earthstone will pay for Bighorn with a com-
of Chisholm Energy, announced in Decem- bination of $770mn in cash and roughly 6.8mn
ber – still pending. The Chisholm assets shares of its Class A common stock valued at
are located in the New Mexico portion of $90mn based on a closing share price of $13.25
the Permian’s Delaware sub-basin, and that on January 28.
transaction is due to be completed in this Bighorn was previously known as Sable Per-
quarter. mian Resources and was taken over by JP Mor-
“Combining the Bighorn acquisition with gan Chase & Co. in 2020 after the company filed
the four acquisitions completed in 2021 and for bankruptcy protection but was unable to find
the pending Chisholm acquisition, we will have a buyer, according to Bloomberg.™

P10 www. NEWSBASE .com Week 05 03•February•2022