i3 Energy, a company working to develop its Liberator and Serenity fields in the UK North Sea, is in talks with banks and potential farm-in partners to secure the necessary funding.
London-listed oil company, which hopes to produce 200 MMbbls from the two fields, on Thursday said it continued to progress its previously announced joint venture (“JV”) farm-out process “and has been pleased with the response”.
“Several companies are conducting due diligence, with additional parties scheduled to enter the process in January, and i3 expects to set a bid date during the course of February,” i3 Energy said.
Apart from JV talks, i3 said it was working with senior and junior lenders in the UK and North America negotiating loans that would, on finalization of agreements, provide between US$100 and US$130 million.
Split between two FPSOs
As for the development – Liberator Phase I – which it expects to bring on stream by mid-2020, the company is looking at an FPSO option. So far, i3 has two options. Repsol Sinopec-operated Bleo Holm FPSO, or an FPSO to be directly leased by i3.
In December 2018, i3 received indicative terms from Repsol Sinopec for Liberator’s use of Bleo Holm FPSO via Ross field infrastructure. i3 on Thursday said the parties were working together agreeing on the terms for Liberator Phase I construction and tie-in, and transportation, processing and operating services agreements.
“These agreements are expected to be finalized alongside the 2019 field development plan (“FDP”) approval by the UK Oil and Gas Authority,” i3 said.
Also, as an alternative to the use of the Bleo Holm, i3 has said it has also executed a Memorandum of Understanding for the provision of a standalone floating, production, offloading and storage (“FPSO”) vessel for the company’s 2020 delivery of Liberator Phase I.
” i3 ‘s lease of the FPSO would eliminate its reliance on access to third-party operated infrastructure. The Company will continue to assess both offtake solutions in order to maximize shareholder value as it moves towards its final investment decision at FDP approval,” i3 said.
Rig secured
Also, Dolphin Drilling on Thursday confirmed the signing of a letter of intent with i3 for an offshore rig charter. Subject to finalization of the deal, which is subject to securing the funds, i3 will use the rig for a three-well appraisal program starting in June.
i3 expects to spend up to 25% of the abovementioned loan which has yet to be secured on the drilling appraisal and development campaign. The rest would be spent for the residual 2019/2020 Liberator Phase I production wells, subsea installation and field tie-in.
The company expects its three-well 2019 drilling programme to cost c.US$41 million with additional capex to 2020 first oil of c.US$90 million, inclusive of considerable contingency.
Majid Shafiq , i3 ‘s CEO, “ We are very pleased with the progress we are making to move the Liberator field towards development and with the ongoing technical maturation of the upside in our acreage to drill-ready status. We look forward to the completion of our FDP and funding initiatives and the commencement of a very exciting drilling programme this summer.”
Offshore Energy Today Staff