Kerogen Capital announces completion of Zennor Petroleum sale to NEO Energy

 

12th July 2021

Kerogen Capital announces completion of Zennor Petroleum sale to NEO Energy

 

Kerogen Capital (“Kerogen”) and Zennor Petroleum Limited (“Zennor”) are pleased to announce today the completion of the previously announced sale of Zennor to NEO Energy Upstream UK Limited (“NEO”) who are backed by HitecVision for a total consideration of up to $625 million, including deferred and contingent payments.

Kerogen and Zennor were advised on the sale by Citigroup Global Markets Limited as their financial advisor and CMS Cameron McKenna Nabarro Olswang LLP as their legal advisor.

Jason Cheng, CEO and Managing Partner of Kerogen Capital, commented:

“We are pleased to have partnered with the Zennor team to create a business that has significant cashflow generation potential as well as further growth optionality. We would like to thank the Zennor team for their immense contributions during this journey. We deeply value the relationships we have developed with the team over the past years and we wish them, as well as NEO, every success going forward.”

Martin Rowe, Managing Director of Zennor Petroleum, commented:

“Today is another step along the road for the Zennor team, and I am heartened by the number of us who have decided to join NEO. We are pleased to have delivered a profitable monetisation for our shareholders and would like to thank Kerogen for their valuable support over the last 6 years. I would also like to thank our lenders, the OGA, our key contractors and our license partners and operators for their ongoing help and support in developing our portfolio and delivering this transaction.”

Enquiries:

 FTI Consulting                                                                                            +44 (0)20 3727 1000

(PR Advisor for Kerogen Capital and Zennor Petroleum)

 

Ben Brewerton / Sara Powell

 

ZennorPetroleum@fticonsulting.com

sckerogen@fticonsulting.com

 

 

 

Kerogen Capital announces sale of Zennor Petroleum to NEO Energy

 

 

8th March 2021

 

Kerogen Capital announces sale of Zennor Petroleum to NEO Energy

 

Kerogen Capital (“Kerogen”) and Zennor Petroleum Limited (“Zennor”) are pleased to announce that Kerogen has reached an agreement with NEO Energy Upstream UK Limited (“NEO”) and HitecVision for the sale of Zennor for a total consideration of up to $625 million, including deferred and contingent payments. The transaction completion is subject to customary regulatory approvals.

 

Since Kerogen’s initial investment in 2015, Zennor has transformed from an early-stage exploration company into a full-cycle E&P player in the UK North Sea through successful appraisal and development of the Finlaggan field, two separate producing asset acquisitions and multiple licence awards in the offshore licensing rounds. In January 2021 Zennor and Kerogen announced its Net Zero Carbon Strategy.

 

Zennor’s deep technical expertise and entrepreneurial spirit enabled it to successfully identify attractive opportunities and create material value by delineating and significantly expanding its reserves and resources base, by implementing commercial and operational optimisation initiatives, and by successfully executing accretive bolt-on acquisitions. The Zennor team will be integrated into the NEO business at completion.

 

Zennor has been a very active and collaborative partner working closely with other operators in the UK North Sea to maximise the recovery of high value barrels and unlocking future growth opportunities.

 

Today, Zennor’s portfolio of c.40 mmboe of net 2P reserves and more than 90 mmboe of net 2C resources is comprised of non-operated interests in the Mungo & Monan, Britannia, Bacchus and Cormorant East producing fields, a 100% operated interest in its flagship Finlaggan development project and interests in several near-field discoveries. Zennor’s net production is expected to exceed 20,000 boepd in Q4 2021, once Finlaggan is onstream.

 

Kerogen and Zennor were advised on the sale by Citigroup Global Markets Limited as their financial advisor and CMS Cameron McKenna Nabarro Olswang LLP as their legal advisor.

 

Jason Cheng, CEO and Managing Partner of Kerogen Capital, commented:

 

“Together with the Zennor team, we have built a portfolio of long-life, high-margin assets with significant further growth potential. With the Finlaggan development nearly complete, we believe this is an opportune time to monetise our investment and realise an attractive outcome for our investors, while leaving room for NEO to deliver the next phase of portfolio growth in synergy with their existing assets.

 

We deeply value the relationship developed with the Zennor team over the past years and we wish them every success going forward as part of the NEO organisation where, we are confident, they can continue to deliver growth at a larger scale.”

 

Martin Rowe, Managing Director of Zennor Petroleum, commented:

 

“We are pleased to be able to deliver an attractive return for our shareholders and we would like to thank Kerogen for their support over the last 5 years. Our relationship with Kerogen has been very collaborative and their support in strategic, financial and technical matters has been instrumental in growing Zennor’s business. We are excited to see our joint efforts culminating in a successful monetisation of Zennor’s portfolio in a transaction with one of the leading players in the UK North Sea.

 

This transaction is a testament to the knowledge, experience, and hard work of the Zennor team that I have had the privilege to work with over these past years. The portfolio of high-quality assets that this team has identified and secured is the reason we have been able to deliver this transaction. Their ability is further amplified by the fact that the Zennor team will be integrated into the NEO business at completion. I would also like to thank our lenders, the OGA, our key contractors and our license partners and operators for their ongoing support in developing and growing our portfolio.”

 

Enquiries:

 

FTI Consulting                                                                                            +44 (0)20 3727 1000

(PR Advisor for Kerogen Capital and Zennor Petroleum)

 

Ben Brewerton / Sara Powell

 

ZennorPetroleum@fticonsulting.com

sckerogen@fticonsulting.com

 

 

 

Zennor Launches Net Zero Carbon Strategy and Achieves Carbon Neutrality in 2020

Zennor Petroleum Limited (“Zennor”), the independent UK based oil and gas company engaged in the appraisal, development, and production in the UKCS, supports the goal of the Paris Agreement to achieve a carbon neutral global economy.

Today, in line with that support and as part of its ongoing Net Zero journey, Zennor is launching its Net Zero Carbon Strategy and announces that it has become one of the first North Sea E&P companies to achieve carbon neutrality for 2020 in Scope 1 and 2 CO2 emissions.

This has been achieved initially by offsetting CO2 emissions through programmes aligned with the UN Sustainable Development Goals.

Zennor recognises that carbon offsetting is not the long-term solution to climate change and needs to be combined with a comprehensive decarbonisation strategy including efforts to reduce carbon emissions from operations.

The UK Committee on Climate Change states that oil and gas will remain a key part of the UK’s energy mix well beyond 2040. As such, Zennor recognises the need to ensure hydrocarbon production with the lowest GHG emissions possible and has committed to work with the E&P industry through the Oil & Gas UK “Roadmap to Net Zero” initiative.

Zennor and its operating partners are working to identify emissions reductions opportunities which include:

  • a review of the potential for platform electrification
  • future repurposing of offshore oil and gas facilities to support new technology developments such as hydrogen and carbon capture and storage
  • the use of Scope 1 and 2 GHG emissions as a key metric in project decisions. For instance, in selecting third-party equipment or vessel suppliers
  • assessment of whether floating offshore wind technology can be incorporated into subsea oil and gas developments

 These initiatives will ensure that we deliver year-on-year improvements to reach our emissions reduction targets in the near and longer-term.

Finally, Zennor has undertaken a gap analysis against the requirements of the Taskforce for Climate-Related Financial Disclosure (TCFD) with the aim to align our disclosures with the recommendations set forth by TCFD from 2021.

Martin Rowe, Zennor’s Managing Director, said:

“Announcing this commitment to Carbon Neutrality for Zennor’s Scope 1 and 2 emissions for 2020 as part of our Net Zero Carbon Strategy is an important first step. I’m proud of the team for taking this initiative and for setting a path for other companies in the North Sea to hopefully follow our lead. 

If our industry is to play its part in addressing climate change, we have to accept responsibility for the impact we have on the environment and to take advantage of every opportunity to reduce that impact as swiftly as possible.

We support the requirement for a just energy transition, and we see ourselves playing a significant role in helping to deliver the UK’s Net Zero commitments within the energy mix outlined by the UK Committee on Climate Change.”

For all media enquiries, please contact:
Ben Brewerton/Sara Powell, FTI Consulting
Tel: +44 (0) 203 727 1000
Email: zennorpetroleum@fticonsulting.com

Zennor Announces Completion of 2020 Finlaggan Subsea Installation Campaign

Zennor Announces Completion of 2020 Finlaggan Subsea Installation Campaign

Subsea Facilities Update
Zennor Petroleum Ltd (“Zennor”) is pleased to announce that the 2020 Finlaggan subsea installation campaign, utilising three separate vessels mobilisations over the summer, has been safely completed.
The Finlaggan manifold was installed adjacent to the two Finlaggan production wells (F1 and F2). This 145-tonne structure will allow well stream level metering to be conducted and provides potential tie-in points for additional wells and fields.
As planned, the 15 pipeline spools to provide the final connections required at either end of the pipeline were all installed on the seabed and the 20km pipe-in-pipe flowline from Finlaggan to the Subsea Isolation Valve (SSIV) skid within the Britannia 500m zone was dewatered.
At year end the Finlaggan development project will be over 90% complete and on target for first production in Q4 2021 following the rescheduled Forties Pipeline System shutdown in Q2 2021.
Financing
Zennor is also pleased to report that in Q3 2020 our lenders agreed to upsize the existing Senior Secured Term Loan Facility to fund the Finlaggan project to £185m, and extend it by one year in line with the latest Finlaggan development schedule, which has been revised as a result of COVID-19.
Martin Rowe, Zennor’s Managing Director, said:
“Despite a challenging macro-economic and operational environment, we’re delighted to have overcome the disruption from the COVID-19 pandemic in order to accomplish this milestone for the Finlaggan project.
The completion of the 2020 subsea installation campaign is a significant step forward and is testament to the quality of the team and lead contractors who have been working with us on this project.
With first production now scheduled for Q4 2021, we also greatly appreciate the extension and upsizing of our loan facilities and would like to thank our lenders for their ongoing support and endorsement of our project.”

For all media enquiries, please contact:
Ben Brewerton/Sara Powell, FTI Consulting
Tel: +44 (0) 203 727 1000
Email: zennorpetroleum@fticonsulting.com

Zennor to be offered blocks in UKCS 32nd Offshore Licensing Round

 

Zennor Petroleum Limited (“Zennor”) is pleased to announce that its wholly owned subsidiary, Zennor Exploration Limited, has been successful in the UK’s 32nd Offshore Licensing Round (“the Round”). Zennor participated in five applications in the Round and is pleased to have been offered awards across all its application areas.

Zennor has been particularly successful in its core Finlaggan/Britannia area with the offer of a number of awards, both Operated and non-Operated, jointly with Chrysaor Production (U.K.) Limited and Chrysaor E&P Limited (“Chrysaor”). The Operated awards include the gas condensate Bowmore discovery and the MacCulloch field.

In parallel, Zennor has also been offered an Operated Licence over UKCS block 21/20b with DNO North Sea (U.K.) Limited which includes the Christian and Bligh discoveries; and a non-Operated Licence over UKCS block 21/24d with Anasuria Hibiscus UK Limited as Operator, which includes the West Teal discovery.

Martin Rowe, Zennor’s Managing Director, said:

“Zennor is extremely pleased with all the potential awards offered by the Oil and Gas Authority in the UK’s 32nd Licencing Round. They build off the awards received in the 30th Round which have put the Murlach (formerly Skua) redevelopment project into our investment plans and we hope that the offer of awards in the Finlaggan/Britannia area in conjunction with the Britannia operator, Chrysaor, will go a long way towards building an aligned growth plan for that area.

We look forward to working with all our existing and new partners to develop the potential of our 32nd Round licences. These licences represent attractive strategic fit with Zennor’s existing portfolio and will further bolster our growth plans in the UK North Sea.

For all media enquiries, please contact:

Ben Brewerton/Sara Powell, FTI Consulting

Tel: +44 (0) 203 727 1000

Email: zennorpetroleum@fticonsulting.com

Zennor Announces Completion of 2019 Finlaggan Subsea Installation Campaign

Zennor Petroleum Limited (“Zennor”), through its subsidiary Zennor Pathway Limited, is currently developing the 100% owned Finlaggan field in the UK Central North Sea (block 21/05c and 21/05d, Licence P2013). The development project is targeting 30mmboe of gas condensate reserves from two subsea production wells tied back 20km to the Britannia platform.

 

Subsea Facilities Update

 

Zennor is pleased to announce that the 2019 Finlaggan subsea installation campaign utilising six separate vessels over the summer has been safely and successfully completed.

 

The programme has seen the 20km long, 10” insulated (pipe-in-pipe) Finlaggan pipeline laid and trenched. After the flushing and pigging of the pipeline the 20km long infield umbilical was laid in the open trench adjacent to the pipeline.

 

Rock dumping of the pipeline and umbilical was completed this weekend with the rock-dumping vessel the last to leave the field.

 

Critical work inside the Britannia 500 metre zone was also completed with the installation of the subsea isolation valve (“SSIV”) structure and the pull-in of the SSIV umbilical to the Britannia platform.

 

At year-end the Finlaggan project will be approaching 85% completion on a value of work done basis.

 

As previously reported, both Finlaggan production wells (F1 and F2) have already been drilled and tested, with each well flowing at more than 12,000 boepd at significantly higher than expected flowing wellhead pressures.

 

The remaining subsea scope, which includes the installation of a manifold at the Finlaggan location, will take place following the planned triennial Britannia/FPS shut down in 2020.

The Finlaggan development project remains on schedule for first production in Q4 2020 as planned.

 

Portfolio Update

 

Zennor has been progressing its operated Greenwell and Leverett projects in Block 15/29c and Blocks 21/2d and 21/3d respectively.

 

On Greenwell, Zennor is evaluating bids for wellheads and site surveys that will enable a pilot well to be drilled in 2020 to facilitate a future fast-track development. In parallel, technical discussions continue with Block 21/03a licencees over plans for the Leverett discovery. Both Greenwell and Leverett are potential tiebacks to the existing Britannia Area infrastructure, with first production targeted for 2022 and 2023 respectively.

 

Elsewhere, rapid progress is also being made on Zennor’s non-operated Platypus and Skua development projects, with both expected to reach project sanction in 2020.

 

Martin Rowe, Zennor’s Managing Director, said:

 

“The completion of this 2019 subsea construction campaign is a significant step forward in the Finlaggan project. The success of the campaign is very clearly attributed to the time and effort invested in the planning and preparation phases, the professionalism of the offshore teams and the close working relationships between the Britannia operator, installation contractor and Zennor teams. Finlaggan remains on track for first production in Q4 2020, taking our production towards 25,000 boepd in the near term.

 

Across the wider portfolio, our fully-funded development programme will see us reach production between 30,000 – 35,000 boepd by 2023.”

For all media enquiries, please contact:

 

Ben Brewerton / Sara Powell, FTI Consulting Tel: +44 (0) 203 727 1000

Email:  zennorpetroleum@fticonsulting.com

Zennor Provides Finlaggan Field Development Update

Zennor Petroleum Limited (“Zennor”), through its subsidiary Zennor Pathway Limited, is currently developing the 100% owned Finlaggan field in the UK Central North Sea (block 21/05c and 21/05d, Licence P2013). The development project is targeting 30mmboe of gas condensate reserves from two subsea production wells tied back 20km to the Britannia platform.

 

Drilling update

 

Zennor is pleased to report successful completion of drilling and testing operations. The Finlaggan production wells (F1 and F2) each flowed more than 12,000 boepd, with rates being constrained by the surface facilities. Both wells also produced at significantly higher than expected flowing well head pressures, highlighting the quality of the reservoir sections in the completed wells. The Transocean drilling rig Paul B Loyd Junior has left the Finlaggan location and has been demobilised to Invergordon. The conclusion of these offshore works represents a key step in de-risking the Finlaggan development and delivering first production in Q4 2020 as planned.

 

Subsea Facilities update

 

Zennor is also pleased to announce that construction work on the 20km subsea pipe-in-pipe system and the electrohydraulic control umbilical is proceeding on schedule for installation in Q3 2019. The primary contractor TechnipFMC and their key subcontractors are making excellent progress towards this next major project milestone.

 

Martin Rowe, Zennor’s Managing Director, said:

 

“All of our teams continue to work exceptionally hard, alongside our main contractors, to deliver the Finlaggan project safely as planned and their progress and achievements to date talk to their skill and dedication.  With the drilling and completion phase behind us we are now fully focussed on the Summer 2019 subsea installation programme which will take us another step closer to realising first production from Finlaggan next year.”

 

For all media enquiries, please contact:

Ben Brewerton / Sara Powell, FTI Consulting

Tel: +44 (0) 203 727 1000

Email: zennorpetroleum@fticonsulting.com

Zennor Provides Finlaggan Field Development Update

Zennor Petroleum Limited (“Zennor”), through its subsidiary Zennor Pathway Limited, is currently developing the 100% owned Finlaggan field in the UK Central North Sea (block 21/05c and 21/05d, Licence P2013). The development project is targeting 30mmboe of gas condensate reserves from two subsea production wells tied back 20km to the Britannia platform, which is operated by ConocoPhilips.

 

Drilling update

 

Zennor is pleased to report that both Finlaggan production wells (F1 and F2) have now been successfully drilled and cased to their target depths with long and highly productive lateral sections through the Lower Cretaceous reservoirs. The results from both wells have been very encouraging with F1 demonstrating high quality hydrocarbon bearing sands in the northern extension of Finlaggan as prognosed, and F2 proving sand continuity over the previously interpreted fault between the southern two segments of the field. Zennor is delighted with the results achieved and the positive implications for reserves and productivity. Completion and clean-up operations across both wells are now under way and are expected to be finished during the current quarter.

 

 

Commercial update

 

Zennor is pleased to announce that on 28 March 2019 all major Finlaggan offtake agreements were executed in line with previously agreed commercial terms. These agreements provide for the export of Finlaggan production through the Britannia facilities, the Forties Pipeline System, the SAGE Terminal and the SEGAL System.

 

 

Martin Rowe, Zennor’s Managing Director, said:

 

“The team have worked exceptionally hard over recent months and I am delighted to see those efforts come to fruition in achieving significant commercial and operational milestones.  All aspects of the Finlaggan development project are firmly on track to deliver first production in Q4 2020 as planned and we greatly appreciate the support we continue to receive from our key contractors, partners, banking syndicate, the OGA and our shareholders.”

 

For all media enquiries, please contact:

Ben Brewerton / Sara Powell, FTI Consulting

Tel: +44 (0) 203 727 1000

Email: zennorpetroleum@fticonsulting.com

Zennor Announces OGA Approval for the Finlaggan Field Development & Signing of a £170mm Senior Secured Term Loan Facility

Zennor Petroleum Limited (“Zennor”) is pleased to announce that it has received approval from the Oil & Gas Authority (OGA) to proceed with the Finlaggan Field development in the UK Central North Sea (block 21/05c), of which it owns 100%.

The development project to recover 26mmboe of 2P gas condensate reserves will include two subsea production wells tied back 20km to the ConocoPhillips operated Britannia platform. First production from Finlaggan is expected in Q4 2020.

Operational update

The Finlaggan development wells are currently being drilled by Transocean’s Paul B Loyd Junior drilling rig. The first of the two development wells, F1, has been successfully drilled through the reservoir section and is cased, cemented and ready for completion and clean-up later in the drilling programme.

The subsea construction contract has been awarded to TechnipFMC, with the main installation works planned for 2019. This includes the laying of a 10” pipe-in-pipe production flowline and electrohydraulic control umbilical back to Britannia.

Financing update

Zennor is also pleased to announce the signing of a £170mm Senior Secured Term Loan Facility to fund the Finlaggan development into production.

The facility was structured, underwritten and syndicated by Societe Generale, London Branch to BNP Paribas, DNB (UK) Limited and Nedbank Limited (together with Societe Generale, the Mandated Lead Arrangers) and Investec Bank plc and Barclays Bank plc (as Lead Arrangers).

Zennor was advised on this transaction by N.M. Rothschild and Pinsent Masons LLP, whilst Bracewell (UK) LLP advised the banks.

Martin Rowe, Zennor’s Managing Director, said:

“This year has been transformational for Zennor. We recently announced the strategic acquisition of an 8.97% working interest in the Britannia Field, subject to partner and regulatory approval, which has doubled our production to circa 5,000boepd. Today, we are fully financed to take Finlaggan through to first production in 2020.

We greatly appreciate the support we have received from the OGA, our banking syndicate and our key contractors and partners in enabling us to push forward with the execution of the Finlaggan project; a key foundation stone of our growing portfolio.”

Scott Robertson, Area Manager, Central North Sea, at the OGA said:

“The Oil and Gas Authority is pleased to approve the Finlaggan field development. The gas field, which was discovered 13 years ago, will tie-back to the Britannia facilities, utilising existing infrastructure, maximising economic recovery from the region.”

2018-10-22 Zennor Petroleum Finlaggan FDP Factsheet

For all media enquiries, please contact:

Sara Powell / Ben Brewerton, FTI Consulting

Tel: +44 (0) 203 727 1000

Email: zennorpetroleum@fticonsulting.com

Zennor Acquisition of Britannia Field Interest

Zennor Petroleum Limited (“Zennor” or “the Company”) is pleased to announce that its wholly owned subsidiary, Zennor North Sea Limited, has entered into a Sale and Purchase Agreement with Mitsui E&P UK Limited (“MEPUK”) in respect of its interests in United Kingdom Continental Shelf Licences P.213, Block 16/26a, Area B and P.345 Block 16/27b Area B which represent an 8.97% working interest in the Britannia Field. Completion of the transaction is subject to customary regulatory and partner consents.

The acquisition of the Britannia Field interest is strategic for Zennor given its 100% operated working interest in the nearby Finlaggan Field. Finlaggan is scheduled to be developed as a sub-sea tieback to the Britannia platform. As notified in the Operations Update dated July 10th, 2018, Zennor is currently drilling two wells as part of the Finlaggan Field development. Further updates on Finlaggan are anticipated to be announced in the coming weeks.

The acquisition also fits with the recently announced 30th Offshore Licencing Round awards where Zennor was successful with several 100% operated awards in and around the Finlaggan and Britannia Fields. These awards include the Leverett Discovery in Block 21/03d, which may form a future potential tieback to the Finlaggan sub-sea infrastructure.

The effective date for the transaction, which doubles Zennor’s net production to circa 5,000 boepd is January 1st, 2018. As part of the transaction agreement, MEPUK will retain the majority of the decommissioning liability up to an agreed cap with Zennor being responsible for the balance.

Martin Rowe, Zennor’s Managing Director, said:

We are delighted with this acquisition which is directly aligned to our Finlaggan project and wider corporate strategy.

Creating core infrastructure hubs to deliver cost effective production is central to our approach. The ability to leverage the Britannia infrastructure will provide Finlaggan and the wider portfolio acquired in the 30th Round with a cost effective, fast-track route to production.