Two oil & gas firms strike trade-off deal ahead of drilling ops

December 19, 2024, by Melisa Cavcic

Norwegian oil and gas players, OKEA and DNO, have made arrangements to exchange partial stakes in two prospects off the coast of Norway, which are slated to be drilled with semi-submersible rigs owned by Odfjell Drilling and Transocean, respectively.

According to DNO, its wholly-owned subsidiary, DNO Norge, has entered into a swap agreement with OKEA to get a 10% interest in PL 1119, containing the Mistral prospect. As a result, the latter will pick up a 10% interest in PL 1109, containing the Horatio prospect.

Located just south of the Åsgard area in the Norwegian Sea, the Mistral prospect is expected to be spud shortly using Odfjell Drilling’s Deepsea Atlantic semi-submersible rig. The drilling activities target estimated pre-drill volumes of 19-57 million barrels of oil equivalent with a medium chance of success.

The Norwegian player underlines that the total drilling time is estimated at 60 days in case of a discovery. Mistral partners include Equinor (50%, operator), Pandion Energy (20%), and OKEA (20% after the transaction). The effective date of the transaction is January 1, 2025.

Upon completion, DNO will retain a 20% interest in PL 1109 following OKEA’s entry in the license, where the Horatio well is scheduled for drilling in the first quarter of 2025, using Transocean’s Transocean Norge semi-submersible rig. Other partners include OMV (Norge) (30%, operator), Aker BP (20%), and Pandion (20%).

Transocean Norge is said to be the first semi-submersible rig that secured the Abate (Power+) notation for greenhouse gas abatement. The semi-sub won a 17-well contract in Norway at day rates between $350,000 and $430,000 in September 2022 for the drilling of all firm and additional potential wells in the period 2023 to 2027.

With no consideration to be paid by either party for the swap of working interests, each party will carry its relative share of the drilling costs for the respective wells. This transaction is subject to government approval.

OKEA sees this swap deal as an opportunity to further diversify its exploration portfolio. The Mistral prospect, located in the south Norwegian Sea, between Draugen and the Aasgard area, is planned to be drilled in December 2024.

On the other hand, Horatio, situated approximately 20 km northwest of the Gjøa platform, is scheduled for drilling in the first quarter of 2025. Recently, Equinor and OKEA temporarily suspended drilling activities in the wake of a shallow gas discovery in PL 1014 at the Arkenstone prospect.