Varg Field, Norway, Commercial Asset Valuation and Forecast to 2020
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Report Summary
The Varg field is located in the Norwegian part of North Sea in Block 15/12 on production license 038. Varg is an offshore field which is at depth of 276 feet with reservoirs at subsurface depth of 2,700m. The operator of the field is Talisman Energy Norge AS which is a Canada-based energy company.
The field is owned by three companies. Talisman Energy Norge AS holds the highest stake of 65%. The other partners include Petoro AS and Det norske oljeselskap ASA.
The Varg field mainly produces crude oil with very low volume of natural gas. The natural gas produced from the field is used for re-injection. The crude oil produced from the field is light with API ranging between 30° to 40° API with 0.22% of sulfur content.
The Varg field started production in 1998 and has produced around 75 million barrels of oil in the last 12 years. The current production (2010) of the field is estimated to be approximately five million barrels.
The life of the field is expected to be around 22-23 years with complete abandonment by 2020. The field is expected to generate $2.3 billion in gross revenues (undiscounted) during its remaining life (starting January 1, 2010) and is expected to yield an IRR of approximately 10.25%.
Scope
The Varg field is located in the Norwegian part of North Sea in Block 15/12 on production license 038. Varg is an offshore field which is at depth of 276 feet with reservoirs at subsurface depth of 2,700m. The operator of the field is Talisman Energy Norge AS which is a Canada-based energy company.
The field is owned by three companies. Talisman Energy Norge AS holds the highest stake of 65%. The other partners include Petoro AS and Det norske oljeselskap ASA.
The Varg field mainly produces crude oil with very low volume of natural gas. The natural gas produced from the field is used for re-injection. The crude oil produced from the field is light with API ranging between 30° to 40° API with 0.22% of sulfur content.
The Varg field started production in 1998 and has produced around 75 million barrels of oil in the last 12 years. The current production (2010) of the field is estimated to be approximately five million barrels.
The life of the field is expected to be around 22-23 years with complete abandonment by 2020. The field is expected to generate $2.3 billion in gross revenues (undiscounted) during its remaining life (starting January 1, 2010) and is expected to yield an IRR of approximately 10.25%.
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.
- 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
1.1 List of Tables 4
1.2 List of Figures 4
2 Varg Field, Norway, Introduction 5
3 Varg Field, Norway, Geology and Formation 6
4 Varg Field, Norway, Equity Partners 7
5 Varg Field, Norway, Crude Oil and Natural Gas Reserves 8
6 Varg Field, Norway, Key Fiscal Terms 8
6.1 Contract Type 8
6.2 Royalty 8
6.3 Bonuses 8
6.4 Rentals 8
6.5 Fees 9
6.6 Taxation 9
6.7 Petroleum Revenue Tax (PRT) 9
6.8 Carbon Dioxide Tax 9
6.9 Deductions 9
7 Varg Field, Norway, Infrastructure 9
7.1 Upstream Infrastructure 10
7.1.1 Wells 10
7.1.2 Varg Platform 10
7.1.3 Varg FPSO 11
8 Varg Field, Norway, Development Plan, Investment and Expenditure 12
9 Varg Field, Norway, Crude Oil Production 13
10 Varg Field, Norway, Field Economics 15
10.1 Varg Field, Economic Assumptions 15
10.1.1 Forecast Commodity Prices 15
10.1.2 Inflation 16
10.1.3 Discount Rate and Representation of Cash Flows 16
10.1.4 Sensitivity 16
10.1.5 Access to the Economic Model 16
10.2 Varg Field, Cash Flow Analysis 16
10.3 Varg Field, Norway, Remaining PV Sensitivity Analysis 18
10.3.1 Remaining NPV Sensitivity to Discount Rates 18
10.3.2 Remaining NPV Sensitivity to Change in Commodity Prices and Production 18
10.3.3 Remaining NPV Sensitivity to Income Tax and Production Rate 19
11 Varg Field, Norway, Summary Cash Flows 20
11.1 Varg Field, Norway, Front End Load Due To Fiscal Policy 21
11.2 Varg Field, Norway, Tax Liability 22
12 Appendix 23
12.1 Methodology 23
12.2 Coverage 24
12.3 Secondary Research 24
12.4 Primary Research 24
12.5 E&P Forecasts 24
12.6 Capital Costs 25
12.7 Exploration and Appraisal (E&A) Costs 25
12.8 Operating Costs 25
12.9 Expert Panel Validation 26
12.10 About GlobalData
12.11 Contact Us
12.12 Disclaimer
1.1 List of Tables
Table 1: Varg Field, Norway, Key Asset Data, 2010 5
Table 2: Varg Field, Norway, Equipments 12
Table 3: Varg Field, Norway, Well Status 13
Table 4: Varg Field, Norway, Project Development 13
Table 5: Varg Field, Norway, Historic and Forecast Production, Crude Oil, Thousand Barrels, 1998-2020 14
Table 6: Varg Field, Norway, Commodity Price Assumptions, 1998-2020 15
Table 7: Varg Field, Norway, Project Analysis Metrics, 2010 17
Table 8: Varg Field, Norway, Remaining PV Sensitivity Analysis Over Discount Rate Vs. Commodity Price Change, in Million Dollars 18
Table 9: Varg Field, Norway, Remaining PV Sensitivity Analysis over Commodity Price Change Vs Production Rate, in Million Dollars 19
Table 10: Varg Field, Norway, Remaining PV Sensitivity Analysis at 10% Discount Rate over Income Tax Change Vs Production Rate, in Million Dollars 20
Table 11: Varg Field, Norway, Asset Summary Cash Flows, Thousand USD, 1998-2020 21
Table 12: Varg Field, Norway, Front End Load, Thousand USD, 1998-2020 21
Table 13: Varg Field, Norway, Tax Liability Estimations, Thousand USD, 1998-2020 22
1.2 List of Figures
Figure 1: Varg Field, Norway, Location Map 6
Figure 2: Varg Field, Norway, Illustrative Diagram of Geology and Formation 7
Figure 3: Varg Field, Norway, Current Equity Details, 2010 7
Figure 4: Varg Field, Norway, Infrastructure Map 10
Figure 5: Varg Field, Norway, Infrastructure - Platforms 10
Figure 6: Varg Field, Norway, Infrastructure- FPSO 11
Figure 7: Varg Field, Norway, Historic Production and Forecast, Crude Oil, 1998- 2020 13
Figure 8: Varg Field, Norway, Gross Revenue Versus Post Tax Cash Flow Analysis, 1996-2020 16
Figure 9: Varg Field, Norway, Remaining PV Sensitivity Analysis Over Discount Rate Vs. Commodity Price Change, in Million Dollars 18
Figure 10: Varg Field, Norway, Remaining PV Sensitivity Analysis over Change in Production Vs. Commodity Price Change, in Million Dollars 18
Figure 11: Varg Field, Norway, Remaining PV Sensitivity Analysis Over Income Tax Change Vs. Production Rate, in Million Dollars 19
