Author: Oksana Hillervik

With the successful completion of its first major debt financing, Pandion Energy AS (Pandion Energy) has established a solid financial platform for continued investments in the company’s high-quality asset portfolio and future growth. Pre-qualified as a licensee on the Norwegian continental shelf in June 2017, the company currently holds a 10 percent interest in the Valhall & Hod fields, 20 percent interest in Cara development project, and interests in further six exploration licenses.

The debt financing package includes a reserve based lending (“RBL”) facility of USD 150 million with an accordion of USD 150 million, and a senior unsecured bond of NOK 400 million. Together with the NOK 400 million exploration financing facility completed in November 2017, Pandion Energy’s investment program is now fully financed with ample room for additional growth opportunities.

Commenting on the financing process, Jan Christian Ellefsen, CEO of Pandion Energy’s said:
“We are very pleased to have completed the debt financing as planned, and to have received such strong support from both leading Nordic and international banks, as well as institutional bond investors. The new capital structure provides us with substantial funding for the ongoing investments in our high-quality asset portfolio, and flexibility to support the future growth of Pandion Energy.”

• On 9 April 2018, the USD 150 million RBL facility was signed with BNP Paribas, DNB, ING and SEB. The facility has a 7-year final maturity (April 2025) and will be initially utilized to refinance existing shareholder loans and future capex commitments on the Valhall and Hod fields, as well as the Cara development project. The RBL facility has an uncommitted accordion of USD 150 million to provide room for financing of additional acquisitions and new development opportunities.
• On 4 April 2018, Pandion completed its debut issue of a NOK 400 million senior unsecured bond with maturity in April 2023. The bond issue was well received by Nordic institutional investors and was significantly oversubscribed. The bond will be listed on the Nordic ABM, a marketplace regulated by Oslo Børs, within 6 months. Nordic Trustee has been appointed as bond trustee.

DNB Markets and Pareto Securities acted as joint lead managers and bookrunners with SEB as co-manager of the bond issue.

Arntzen de Besche acted as legal advisor to Pandion Energy. RBL banks were advised by Michelet & Co and managers of the bond issue were advised by Wikborg Rein.

The Ministry of Petroleum and Energy has approved the plan for development and operation (PDO) for Valhall Flank West development on Friday 23 march.

Aker BP ASA is the operator of the Valhall and Hod fields. Pandion Energy AS holds 10% ownership interest in the Valhall area, including licenses PL006B, PL033 and PL033B.

Valhall is one of the largest oil fields in the southern part of the Norwegian sector in the North Sea. The Valhall Flank West project aims to continue the development of the Tor formation in Valhall on the western flank of the field, with startup of operation in fourth quarter 2019.

Valhall Flank West will be developed from a new Normally Unmanned Installation (NUI), tied back to the Valhall field centre for processing and export.

Recoverable reserves for Valhall Flank West are estimated to be around 60 million barrels of oil equivalent.

Further details available from the Ministry’s website (Norwegian only).

Pandion Energy AS (Pandion Energy) has been awarded two new prospective exploration licenses under the 2017 Norwegian APA (Awards in Pre-defined Areas) License Round on the Norwegian Continental Shelf.

The APA award was announced by the Minister of Petroleum and Energy (MPE), Terje Søviknes on Tuesday 16. January. For more information about APA 2017 see MPE’s website.

Both licenses are located in the Norwegian North Sea:

• License PL 912 (blocks 16/4, 5 & 7) is located at the southern margin of the Utsira high, south east of the Luno II discovery and west of PL 776 where Pandion Energy is a partner with 40% participating interest. Pandion Energy is pleased to be offered the opportunity to bring our work from this area into the new license. Pandion Energy has been offered a 30% participating interest in PL 912.
• License PL 929 (blocks 35/6 & 36/4) is located at the Måløy slope, between the Agat field to the north and the Gjøa field to the south. PL 929 lies in an area of strategic importance to Pandion Energy, where the team can utilize the experience from PL 636 and the Cara discovery to the south of the license. Pandion Energy has been offered a 20% participating interest in PL 929.

To Pandion Energy, these annual rounds in mature areas represent a very important source to attractive exploration opportunities.

Jan Christian Ellefsen, Pandion Energy’s CEO, commented:

“We are very pleased to be awarded these two licenses in the Awards in Predefined Areas (APA) 2017 round. To Pandion Energy, these annual rounds in mature areas represent a very important source to attractive exploration opportunities. The Cara development project in PL 636, one of the largest oil and gas discoveries in 2016, is a good example of the value creation potential in mature areas, awarded as part of the APA 2011 round. Having focused extensively on technical quality and appropriate risk-reward in our application work, we now look forward to maturing the exploration targets identified in these licenses further together with our partners.”

Pandion Energy AS (Pandion Energy) has entered into an agreement with Aker BP ASA (Aker BP) to acquire a 10 percent interest in the Valhall area, including licences PL006B, PL033 and PL033B.

Since production commencement in 1982, the Valhall field continues to be one of the largest oil fields in the southern Norwegian North Sea. Together with Hod field over one billion barrels of oil equivalent has been produced, more than three times the initial expected volume. Following commissioning of a new combined production and hotel platform in 2013, the field is currently producing ca. 37.5 kboepd* and is expected to continue to produce for several decades. Aker BP, the operator of Valhall field, has stated an ambition to produce at least an additional 500 million barrels of oil equivalent.

Jan Christian Ellefsen, Pandion Energy’s CEO, commented:

We are pleased and proud to be chosen by Aker BP to partner on such a high quality asset. By acquiring a 10 percent interest in Valhall, Pandion Energy gains exposure to a material production base with significant value-creation potential through near-term growth projects and substantial resource upside from field redevelopment, appraisal and exploration opportunities.

This is an important milestone in the growth of Pandion Energy, which was established in November last year. The company also holds a 20 percent interest in the Cara development project, one of the largest discoveries on the Norwegian Continental Shelf in 2016, where ENGIE E&P is the operator.

The transaction is subject to customary conditions for completion, including approval by the Norwegian Ministry of Petroleum and Energy.

For more information on Valhall, please see: https://www.akerbp.com/en/our-assets/production/valhall/

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*Average gross production rate for first 9 months in 2017

Pandion Energy has entered into a loan agreement with BNP Paribas and Skandinaviska Enskilda Banken AB (publ) (SEB) for the financing of its exploration and appraisal activities on the Norwegian continental shelf (NCS). The facility amount is NOK 400 million with an accordion of NOK 200 million.

Jan Christian Ellefsen, Pandion Energy’s CEO, commented:
“Investments within exploration and appraisal projects are a core part of our growth strategy and with the Exploration Finance Facility (EFF) secured, we now have all the tools in place to execute on our business plan. We are very pleased with securing our first finance facility with two highly experienced E&P banks that can support us as we develop and expand our portfolio.”

The banking facility will work in combination with previously committed equity capital from Kerogen Capital. Earlier this year Kerogen Capital announced that it may commit up to US$300 million to Pandion Energy as its portfolio develops.

Pandion Energy, founded in November 2016, is a private oil and gas company focusing on exploration, appraisal and development opportunities in all parts of the Norwegian Continental Shelf (NCS). The company was prequalified as a Licensee on the NCS in June this year. Pandion Energy has recently applied for licenses in the Awards in Predefined Areas (APA) round and is currently also assessing other investment opportunities on the NCS.

ENGIE E&P, the operator of the Cara-licence (PL 636) in the Norwegian sector of the North Sea has increased the resource estimate for the Cara discovery to 56 – 94 million barrels of oil equivalent. Pandion Energy has a 20% interest in the Cara licence PL636.

Cara is a gas and oil discovery in PL 636 in block 36/7, located approximately 14 kilometres from the ENGIE E&P operated Gjøa facilities. The original volumes were estimated to be between 4.5 and 12 million standard cubic metres (MSm³) of recoverable oil equivalent, which corresponds to 25 – 70 million barrels. This made Cara the second largest discovery on the Norwegian continental shelf in 2016, according to the Norwegian Petroleum Directorate.

Increase in volumes

The operator now estimates the volumes of the discovery to be in the range of 9 – 15 million standard cubic metres (MSm³) of recoverable oil equivalent. This corresponds to 56 – 94 million barrels.

Since the discovery in 2016, the expanded data acquired during drilling and testing of the well has been analysed, resulting in increased volumes, which give improved economics and a more robust field development project.

Tie-back to Gjøa

This week, the Cara-licence reached the “Concretisation Decision”*, which is the feasibility decision gate in the Norwegian petroleum system. At this stage, the licensees have identified at least one technical and economically feasible concept that provides a basis for initiating studies that should lead to concept selection by 1^st November 2018.  The suggested concept involves a tie-back to the ENGIE E&P operated Gjøa-facilities.

Expected start-up of production at the Cara field is being targeted for late 2020/2021.

Strengthened foundation for further growth for Pandion Energy.

Jan Christian Ellefsen, the CEO of Pandion Energy commented:
“This is positive news and in line with our own understanding of the discovery. This represents a substantial increase in contingent resources for Pandion Energy given we only recently prequalified as a licensee on the Norwegian continental shelf. The Cara discovery is our first development and a good example of the type of investment opportunities we are targeting through exploration as well as when evaluating farm-in opportunities in development projects and producing assets. The foundation for our growth has been further strengthened.”

 

Licence partners in PL636: Partners in PL636 are: ENGIE E&P (30%, Operator), Idemitsu Petroleum (30%), Pandion Energy (20%) and Wellesley Petroleum (20%)

* In Norwegian terminology: BoK/Beslutning om konkretisering.

Dr. Alan Parsley has been appointed as new Chairman of the Board of Directors of Pandion Energy AS (“Pandion Energy”). Parsley comes to Pandion Energy with over 45 years’ experience in the oil and gas industry, predominantly at Shell, where he held senior positions including Global Head of Exploration and Head of New Business Ventures, Chief Executive of Shell Syria and Chairman of Shell Australia. Parsley is currently an Executive Board Member of Kerogen Capital, and a Non-executive Director of Buried Hill Energy and Chair of Zennor Petroleum, both of which are Kerogen’s portfolio companies. He also formerly served as a member of the Board of Woodside Petroleum Ltd.

Alan Parsley has replaced Jason Cheng, who will continue to serve as a Board member of Pandion Energy.

Parsley graduated from the University of Edinburgh and holds a BSc and a PhD in Geology. He was a member of the Court of Heriot-Watt University from 2005 to 2011.

Pandion Energy has had an excellent start on the NCS, which underpins the skillset and the experience of the team. The company has an established portfolio of licenses, and has recently submitted their first APA applications on September 1.

“Pandion Energy has had an excellent start on the NCS, which underpins the skillset and the experience of the team. The company has an established portfolio of licenses, and has recently submitted their first APA applications on September 1. We see great potential on the NCS and are currently evaluating several prospects for further growth”, says Parsley.

Pandion Energy, founded in November 2016, is a private oil and gas company focusing on exploration, appraisal and development opportunities on the Norwegian continental shelf.

Pandion Energy AS (“Pandion Energy”) is pleased to announce that the company has been pre-qualified as licensee on the Norwegian Continental Shelf (“NCS”) and received an approval for the acquisition of all licences in Tullow Oil Norge AS’ existing portfolio including a 20% interest in PL 636 containing the Cara oil and gas discovery. Cara is an attractive discovery located just 6 km northeast of the existing Gjøa infrastructure in the Norwegian North Sea.

“The pre-qualification of Pandion Energy and completion of the transaction with Tullow Oil Norge AS is an important milestone for the company, demonstrating the quality of our organisation and operational platform. Since founding the company in November last year, we have built up a pipeline of investment opportunities spanning from exploration assets to development projects. With all required approvals in place, we are now ready to capture these opportunities through acquisitions, farm-ins and licensing rounds”, says Jan Christian Ellefsen, CEO of Pandion Energy.

The pre-qualification of Pandion Energy and completion of the transaction with Tullow Oil Norge AS is an important milestone for the company, demonstrating the quality of our organisation and operational platform.

Pandion Energy, founded in November 2016, is a private oil and gas company focusing on exploration, appraisal and development opportunities in all parts of the NCS.

The Pandion Energy team has a long track record of technical, commercial and financial success on the NCS, having worked together for almost 10 years at Tullow Oil Norge and its predecessor, Spring Energy. Backed by Kerogen Capital, an international private equity fund manager specialising in the international oil and gas sector, Pandion has a solid foundation for creating value on the NCS.