Page 9 - Euroil Week 28 2019

EurOil PERFORMANCE EurOil
Okea sees profits surge on acquisitions
NORWAY
The earnings report comes a month after a disaapointing IPO for the private equity- backed rm.
OKEA, the private equity-backed oil and gas producer with expansion plans in Norway, swung from loss to pro t in the second quarter on the back of output from recent eld takeovers.
e Norwegian company, whose sharehold- ers include ai petroleum group Bangchak and private oil investor Seacrest Capital, has reported an operating profit of NOK367mn ($42mn) for April-June, compared with a NOK19mn ($2.2mn) loss for the second quarter of 2018.
Okea acquired Royal Dutch Shell’s interests in the Draugen and Gjoa elds on the Norwegian shelf last November in a deal worth $556mn. As a result, its output soared to 20,045 barrels of oil equivalent per day in the second quarter, from just 358boepd a year earlier. Revenues conse- quently surged to NOK1.04bn ($121mn), up from NOK28mn ($3.3mn).
Earnings were also buoyed by higher oil and gas prices, with the company selling its crude oil and condensate at $60.7 per barrel in the sec- ond quarter, compared with $55.3 in the same period last year. EBITDA reached 594mn krone ($69mn), reversing a year-earlier loss of 13mn krone ($1.5mn).
Okea has set out to buy stakes in small but pro table Norwegian elds with up to 100mn barrels of oil that have been overlooked by its larger competitors. Its earnings report this week serves as testament to the success of this strategy.
Investors seemed less than convinced with the company’s credentials at its initial public offering (IPO) in Oslo last month, however, which raised only NOK315mn ($36.7mn) – less than half of what management had been hoping for. While Europe’s oil and gas industry is see- ing record numbers of stock market otations, investors are cautious amid uncertain long-term prospects for oil demand.
“Okea’s ambition is to signi cantly li near- term production,” CEO Erik Haugane said in a statement, detailing the company’s plans to drill an in ll plot well at Draugen and an exploration well at the nearby Skumnisse prospect in the fourth quarter.
Haugane added that the Yme eld project was on track to deliver rst oil in the rst half of 2020, while P1 development plans at Gjoa have been approved, with production slated to start in late 2020.™
POLICY
Safety breaches found at Hammerfest LNG
NORWAY
Equinor is not required to cut production, but it will have to address the problems by year-end.
NORWAY’S oil industry safety watchdog has agged up safety breaches at the Equinor-oper- ated Hammerfest LNG terminal.
Equinor was forced to close the liquefaction plant down on March 11 following problems with safety valves, according to the Petro- leum Safety Authority (PSA). Operations were restarted later that month, although the outage led PSA to begin an investigation.
“Heat trace cables and insulation were miss- ing from 190 of these valves. Equinor consid- ered the overall position to be so serious and uncertain that a shutdown and correction were required,” the PSA said in a report. “ e condi- tions of these valves [had] been identi ed in ear- lier reviews conducted by Equinor, without the weaknesses being corrected.”
The agency concluded that Equinor had failed to manage the safety problems adequately, carry out risk assessments and correct them a er their discovery, as well as register the incidents.
It did not impose any production restrictions on the plant, but ordered Equinor to address its ndings by December 31.
e Hammerfest terminal is located at the northern tip of Europe, processing gas from the Snoehvit eld in the Barents Sea. It is capable of producing 4.3mn tonnes per year (tpy) of LNG for export to markets in Europe and Asia.
Equinor’s partners in the venture are another state company called Petoro, France’s Total, the UK’s Neptune Energy and Germany’s DEA.
e Hammerfest facility su ered another dis- ruption in January as a result of technical chal- lenges with a compressor station.
Equinor had originally intended to expand the terminal utilising gas at a pair of satellite dis- coveries near Snoehvit, but this project is cur- rently on hold.™
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