Friday 19 October 2018

Alpha Petroleum Resources Limited, an upstream oil and gas operator focused on the UK sector of the North Sea and backed by private equity firm Petroleum Equity, today announces that it has entered into agreements with Teekay Offshore Partners L.P. for its Petrojarl Varg Floating Production Storage and Offloading (“FPSO”) unit to be deployed to the Cheviot oil field. Cheviot is 100 per cent owned by Alpha Petroleum and is one of the largest undeveloped oil fields in the UK sector of the North Sea.

Further to the Front-End Engineering and Design (“FEED”) study agreement between Alpha Petroleum and Teekay Offshore announced in April 2017, these latest agreements, which are subject to condition precedents such as financing, will facilitate Cheviot-specific process modifications to be made to the FPSO unit, ensuring that it can safely operate for the maximum 10-year term of the contract whilst maximising production. The modifications will be made by Sembcorp Marine Rigs & Floaters PTE. Ltd in Singapore with yard work on the FPSO scheduled to commence in the first quarter of 2019.

Alpha Petroleum expects to achieve sanction for the Cheviot development in Q4 2018 and is targeting first oil production in Q2 2021, at an expected rate of at least 30,000 barrels per day. Alpha Petroleum has already announced that Baker Hughes GE (“BHGE”) will partner with the firm on the advancement of the subsea infrastructure and integrated drilling services for Cheviot.

The Cheviot development programme will consist of a minimum of 18 wells: 13 production wells, two water injection wells and two gas injection wells. It also includes one production well established in the satellite Peel oil reservoir. Development of the Cheviot field is predicated upon rigorous evaluation of historical production data and new 3D seismic surveys. Alpha Petroleum has concluded that maximum recovery would be achieved via re-injection of produced gas and water and use of horizontal wells to minimise drawdown.

Alpha Petroleum is backed by Petroleum Equity, an alternative investment firm established in 2012 to address the significant lack of alternative capital providers focused on upstream oil & gas investment opportunities outside North America. Petroleum Equity’s senior industry team has deep and specialist expertise in oil & gas investments, with an average of 27 years’ experience in the sector.