Ekofisk Field, Norway, Commercial Asset Valuation and Forecast to 2027

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Ekofisk is an oil field located in the southern part of the North Sea in the block 2/4 – production license 018, awarded in the year 1965. The sea depth in the area is between 70-75 meters. It is one of the largest fields in the basin. ConocoPhillips Scandinavia AS is the operator of the field. Ekofisk’s test production was started in 1971 after eighteen months of the initial discovery, by the means of a discovery well and three appraisal wells tied to the jack-up facility Gulftide.

The two major equity partners of the Ekofisk field are ConocoPhillips Scandinavia AS and Total E&P Norge AS with 35.11% and 39.90% stake respectively. The other partners are the Eni Norge AS, 12.39%, Petoro AS 5%, and Statoil with 7.6% stake.

The Ekofisk field was discovered in 1969. ConocoPhillips got the development approval in March 1972 and the field came on stream in June 1971. The produced liquid is a light, low sulfur North Sea crude oil with an API of 38o. The price of the Ekofisk crude oil is at par with the Brent Blend.

The Ekofisk field produced an estimated average of 66.2 million barrels of oil equivalent (MMboe) during 2009. The peak production was recorded in the year 2002 where the production was 127.2 million barrels of oil equivalent.

The life of the Ekofisk field is expected to be around 57 years with complete abandonment during 2027. The field is expected to generate $61.6 billion in revenues (undiscounted) during its remaining life (starting January 1, 2010) and is expected to yield an IRR of around 10.5%.

Scope

• The report provides detailed information on oil and gas production, infrastructure, reserves, geology, operator and equity partners and the latest fiscal terms applicable to the asset and provides its fair value (Remaining Net Present Value) based on remaining reserves, forecast production, capital and operational costs, fiscal regime and commodity prices.
• The report also provides additional valuation parameters like Internal Rate of Return (IRR), Profitability Index (PI), Pay Back (discounted and undiscounted), Entitlement Production (EP) and Working Interest (WI) to enhance your decision making process.
• This report provides detailed sensitivity analysis of the remaining NPV with changes in the commodity prices, discount rate, production and key fiscal terms.
• Detailed cash flows over the life of the asset are included in the report. These cash flows cover a wide range of calculations related to various payments to the government/licensing authority.
• Interactive Excel models can be used to derive custom valuations, sensitivities and cash flows based on the specific inputs by the user in the model. These custom inputs vary from production data, cost information, price information and fiscal terms information.

Reasons to buy

• Make well informed investment decisions based on detailed operational analysis and cash flow forecasts
• Estimate the fair value of your future investment under different economic and fiscal conditions
• Value a prospective investment target through a comprehensive analysis using focused forecasting and valuation methodologies.
• Supporting interactive excel model will enhance your decision making capability in a more rapid and time sensitive manner
• Evaluate how the changes in the country’s fiscal policies impact the cash flows and the present value of the asset

  1 Table of contents 2

1.1 List of Tables 4
1.2 List of Figures 4

2 Ekofisk Field, Norway, Introduction 5

3 Ekofisk Field, Norway, Geology, Geography and Formations 7

4 Ekofisk Field, Norway, Equity Details 9

5 Ekofisk Field, Norway, Crude Oil and Natural Gas Reserves 10

6 Norway, Fiscal System 10
6.1 Norway Petroleum Fiscal Environment 10
6.1.1 Governing Law 10
6.1.2 Licensing Authority 10
6.1.3 State Participation 10
6.1.4 Contract Type 10
6.2 License Terms 11
6.2.1 Exploration License (EL) Duration 11
6.2.2 Relinquishment during Exploration 11
6.2.3 Exploration obligation 11
6.2.4 Production Rights, Area & Duration 11
6.3 Key Fiscal Terms 11
6.3.1 Royalty 11
6.3.2 Fees 11
6.3.3 Special Petroleum Tax 11
6.3.4 Taxation 12
6.3.5 Carbon Dioxide Tax 12
6.3.6 Deductions and Depreciation 12

7 Ekofisk Field, Norway, Infrastructure 12
7.1 Upstream Infrastructure 12
7.2 Midstream Infrastructure 12
7.2.1 Ekofisk Pipelines 12

8 Ekofisk Field, Development Plan, Investment and Expenditure 15

9 Ekofisk Field, Norway, Oil and Gas Production 15

10 Ekofisk Field, Norway, Field Economics 17
10.1 Ekofisk Field, Norway, Economic Assumptions 17
10.1.1 Forecast Commodity Prices 17
10.1.2 Inflation 18
10.1.3 Discount Rate and Representation of Cash Flows 18
10.1.4 Sensitivity 18
10.1.5 Access to the Economic Model 18
10.2 Ekofisk Field, Norway, Cash Flow Analysis 18
10.3 Ekofisk Field, Norway, Remaining PV Sensitivity Analysis 20
10.3.1 Remaining NPV Sensitivity to Discount Rate and Commodity Price 20
10.3.2 Remaining NPV Sensitivity to Changes in Commodity Prices and Production Rates 21

11 Ekofisk Field, Norway, Summary Cash Flows 23
11.1 Ekofisk Field, Norway, Front End Load Due To Fiscal Policy 25
11.2 Ekofisk Field, Norway, Tax Liability 28

12 Appendix 30
12.1 Methodology 30
12.2 Coverage 30
12.3 Secondary Research 30
12.4 Primary Research 30
12.5 E&P Forecasts 31
12.6 Capital Costs 31
12.7 Exploration and Appraisal (E&A) Costs 31
12.8 Operating Costs 32
12.9 Expert Panel Validation 32
12.10 About GlobalData
12.11 Contact Us
12.12 Disclaimer

1.1 List of Tables

Table 1: Ekofisk Field, Norway, Key Asset Data, 2010 5
Table 2: Ekofisk Field, Norway, Reserves, 2010 10
Table 3: Ekofisk Field, Norway, Historic and Forecast Production, Thousand Barrels, 1971-2027 16
Table 4: Ekofisk Field, Norway, Commodity Price Assumptions, 2010-2025 18
Table 5: Ekofisk Field, Norway, Project Analysis Metrics, 2010 19
Table 6: Ekofisk Field, Norway, Remaining PV Sensitivity Analysis Over Discount Rate Vs. Commodity Price Change, in Billion Dollars, 2010 20
Table 7: Ekofisk Field, Norway, Remaining PV Sensitivity Analysis over Commodity Price Change Vs Production Rate, in Billion Dollars, 2010 21
Table 8: Ekofisk Field, Norway, Remaining PV Sensitivity Analysis over Commodity Price Change Vs Production Rate, in Billion Dollars, 2010 22
Table 9: Ekofisk, Norway, Remaining PV Sensitivity Analysis at 10% Discount Rate over Income Tax Change Vs Production Rate, in Million Dollars, 2010 22
Table 10: Ekofisk Field, Norway, Asset Summary Cash Flows, Thousand $, 1971-2027 23
Table 11: Ekofisk Field, Norway, Front End Load, Thousand $, 1971-2027 25
Table 12: Ekofisk Field, Norway, Tax Liability Estimations, Thousand $, 1971-2027 28

1.2 List of Figures
Figure 1: Ekofisk Field, Norway, Location, 2010 6
Figure 2: Ekofisk Field, Norway, Geological Details showing Lithology, Source Rock and Reservoir of the Murzuq Basin, 2010 7
Figure 3: Ekofisk Field, Norway, Top Structure Map of Ekofisk Formation of the Ekofisk Field 8
Figure 4: Ekofisk Field, Norway, Equity Details, 2010 9
Figure 5: Ekofisk Field, Norway, Oil and Gas Pipeline Layout for Ekofisk 13
Figure 6: Ekofisk Field, Norway, Infrastructure Diagram 14
Figure 7: Ekofisk Field, Norway, Historic Production and Forecast, 1971-2027 15
Figure 8: Ekofisk Field, Norway, Historic Production and Forecast, 1971-2027 16
Figure 9: Ekofisk Field, Norway, Gross Revenue Versus Tax Cash Flow Analysis, 2002-2025 18
Figure 10: Ekofisk Field, Norway, Remaining PV Sensitivity Analysis Over Discount Rate Vs. Commodity Price Change, in Billion Dollars, 2010 20
Figure 11: Ekofisk Field, Norway, Remaining PV Sensitivity Analysis over Change in Production Rate Vs. Commodity Price Change, in Billion Dollars, 2010 21