BW Energy: Proceeds with phased Maromba development and agreement to purchase FPSO

BW Energy: Proceeds with phased Maromba development and agreement to purchase FPSO

22 Apr 2022 07:30 CEST

Proceeds with phased Maromba development and agreement to purchase FPSO

BW Energy has decided to proceed with the Maromba development project offshore
Brazil and signed an agreement to purchase the FPSO Polvo from BW Offshore. The
FPSO will be upgraded and redeployed on the field. The development plan is based
on an initial drilling campaign of three wells with planned first oil in 2025
and a second campaign with a further three wells in 2027. The investment
decision is subject to certain conditions precedent, including completion of the
project financing.

Highlights:

* Phased subsea development with six production wells and tied back to a
redeployed FPSO
* First oil from Phase 1 planned in 2025
* Expected peak oil production of 30-40,000 barrels per day
* Agreement to purchase FPSO Polvo for a total consideration of USD 50 million
* Plan for efficient FPSO refurbishment and life extension established

Unlocking material production

"We have worked to optimise the Maromba development plan since the acquisition
in 2019 and during the Covid-19 pandemic. This includes technical evaluations,
full-spectrum analysis of geological, seismic and well data, as well as
extensive reservoir modelling and simulations. Based on our findings, we have
decided to proceed with a development with six horizontal production wells
connected to a FPSO to unlock significant oil production and long-term value
generation for our stakeholders," said Carl K. Arnet, the CEO of BW Energy.

A development in stages enables improved reservoir monitoring and optimisation
of the second drilling campaign. Total oil production at peak is expected
between 30-40,000 barrels per day. The technical evaluation revealed that water
injection is not required for the first three wells and is a contingency for the
second drilling campaign. Extensive work has also confirmed that Dual Electric
Submersible Pumps offer the best artificial lift solution with extended life and
reduced workover frequency. The subsea layout has also been enhanced to reduce
costs and facilitate future expansions.

FPSO Polvo - "A near perfect fit"

FPSO Polvo recently ended its charter on the Polvo field in Brazil, which is
located close to the Maromba field and has similar oil and reservoir
characteristics. An assessment of refurbishment costs has been completed and
discussions with relevant shipyards are well underway. The FPSO will be designed
for up to 10 production wells with 1.2 million barrels of storage capacity. The
total liquid capacity will be 85,000 barrels per day with oil production
capacity of 65,000 barrels per day and water treatment capacity of 75,000
barrels per day.

BW Energy has signed an agreement to purchase the FPSO from BW Offshore
effective no later than July 24, 2023, for a total consideration of USD 50
million. The valuation of the FPSO has been confirmed by an independent third
party. The agreement to purchase the FPSO, instead of entering a traditional
lease and operate contract, is a consequence of related- and associated-party
tax legislation in Brazil.

Final Investment Decision (FID)

"The FPSO Polvo is a near perfect fit for Maromba. We know the vessel well and
have extensive in-house competencies and capabilities in planning and executing
such a repair and life extension project. Re-using existing energy
infrastructure enables reduced investments, shorter time to first oil and
significantly reduced CO2 emissions in the development phase as compared to
installing new production assets," said Carl K. Arnet.

"We are also mindful of the inflationary pressures affecting our industry as we
progress contract discussions with the shipyards and for other long-lead items.
We are also evaluating financing alternatives for the field development plan and
see strong interest from various sources," Arnet continued.

The FID is subject to completion of the financing for the project. The Brazilian
regulator, ANP, has approved the development plan and the Company expects to
receive full IBAMA environmental approval in due course.

Maromba Field

Maromba is located off the Brazilian coast in the Campos Basin in approximately
160 metres of water depth. Nine wells were drilled in the license between 1980
and 2006, and oil was found in eight of these across various reservoirs. Gross
2C reserves in place are estimated at 467 million barrels with approximately
100 million barrels estimated as recoverable volumes. BW Energy acquired 100%
ownership in Maromba in 2019 for a total of USD 115 million, of which USD 85
million remains to be paid to the sellers at predefined milestones.

The Company will provide further information on the Maromba development plan in
connection with the first quarter 2022 earnings release on 27 May.

For further information, please contact:

Knut R. Sæthre, CFO BW Energy, +47 91 11 78 76
[email protected] (mailto:[email protected])

About BW Energy:

BW Energy is a growth E&P company with a differentiated strategy
targeting proven offshore oil and gas reservoirs through low risk phased
developments. The Company has access to existing production facilities to reduce
time to first oil and cashflow with lower investments than traditional offshore
developments. The ain assets are 73.5% of the producing Dussafu Marine Permit
offshore Gabon and a 95% interest in the Maromba field in Brazil, both
operated by the Company. Total net 2P+2C reserves were 241 million barrels at
the start of 2022.

This information is considered inside information pursuant to the EU market
abuse regulation and is subject to the disclosure requirements pursuant to
section 5-12 the Norwegian Securities trading Act. This stock exchange release
was published by Regine Andersen, IT & Communication support, BW Energy, on
22 April at 07.30 CEST.

More information:
Access the news on Oslo Bors NewsWeb site

Source

BW Energy Limited

Provider

Oslo Børs Newspoint