Six-well North Sea drilling campaign with $690 million price tag coming up next year to unleash more high-value barrels

Norwegian oil and gas player Vår Energi has greenlighted a final investment decision (FID) for a multi-well drilling program, which aims to develop the next stage of a field life extension project in the North Sea off the coast of Norway.

Vår Energi’s plan to unlock more high-value barrels in the Balder area has led the firm and its license partner, Kistos Energy, to reach the FID for the Balder Phase V project, which is envisioned as a fast-track development and a key contributor to sustaining long term production and value creation beyond 2025.

This will be accomplished by developing 33 million barrels of oil equivalent (mmboe) of gross proved plus probable (2P) reserves for a capital spend of $690 million gross and with an attractive breakeven price of around $30 per barrel.

The duo plans to begin drilling activities in the first half of 2025 and wrap them up in 2026, with the first wells coming on stream by the end of 2025. Given its plans to bring ongoing development projects on stream over the next three quarters, Vår Energi believes to be on track to reach daily production levels of around 400,000 barrels of oil equivalent per day by the end of 2025.

The Norwegian player plans to sustain long-term production by developing over 20 early-phase projects. The Balder Phase V project will drill up to six infill wells using all the remaining available template well slots in the existing Balder subsea facilities and tie them back to the FPSO Jotun for processing.

Vår Energi claims that the drilling of multilateral wells has extended the reservoir area, boosted recoverable reserves and recovery factor, reducing the number of wells required. While Balder Phase V is the first of these projects to be sanctioned, the firm expects multiple further project FIDs during next year.

Torger Rød, COO of Vår Energi, commented: “The Balder area in the North Sea is one of Vår Energi’s core hubs and constitutes significant future resource potential. With the refurbished Jotun FPSO on track to commence production from the field within Q2 2025 we have the tool to unlock additional production.

“The sanctioning of Balder Phase V aligns with our strategy of maximising value in our core hub areas by utilising existing capacity and infrastructure. I am very pleased to see how the upgraded FPSO will contribute to amplifying value creation from the area with such immediate effect. Beyond Balder Phase V, we are also maturing a Balder Phase VI project ensuring further long-term value creation in the area.”

The company had a production of 281 kboepd in the first nine months of 2024, in line with its expectations. Current plans indicate an addition of around 150 kboepd of valuable growth towards Q3 2025. The Balder field is operated by Vår Energi (90%) with Kistos Energy Norway as its partner (10%).

“The use of advanced multilateral well technology enables targeting high value barrels, with a low breakeven, high rate of return and short time to market, showcasing our value driven approach to applying technology,” Rød highlighted.

The firm’s Balder X project is still targeting a start-up in Q2 2025 for the recovery of around 200 million barrels of additional reserves from the Balder-Ringhorne area, where the Norwegian player is working to prolong the production lifetime to 2045, as part of the Balder Future re-development project in the North Sea.

The company recently joined forces with Equinor on a new area-wide emergency preparedness solution for the southwestern Barents Sea. The Norwegian government is convinced that the Barents Sea area contains more undiscovered hydrocarbons, thus, further exploration activities are encouraged to uncover this potential.