LOTOS Exploration & Production Norge (LOTOS), a subsidiary of the Polish energy corporation Grupa LOTOS S.A., has reached an agreement with Centrica Energy Norway, a subsidiary of the UK based Centrica Plc., to acquire shares in 14 licences on the Norwegian Continental Shelf, including one operatorship. The package of oil and gas assets includes producing fields, developments, discoveries and exploration prospects.

The current production from the licences LOTOS acquires is above 5 000 barrels oil equivalents (oe) per day; 70 per cent natural gas and 30 per cent condensate. Reserves added to LOTOS’ portfolio following the acquisition will be 9* million barrels oil oe in producing fields and contingent resources of 31* million oe in fields in development planning phase. The split between oil and gas in the fields in the development planning phase is equal to that of the producing fields. In addition there is identified a number of prospective exploration targets, including the Trell prospect expected to spud later this year.

The purchase includes a 5 per cent interest in the Heimdal field, one of the major gas-hubs on the Norwegian Continental Shelf. In addition, it includes a 30 per cent interest in Byggve/Skirne, a 20 per cent interest in Atla and a 25.8 per cent interest in Vale, all of which are producing fields.

LOTOS will also acquire a 10 per cent interest in FriggGammaDelta discovery, a 50 per cent interest and operatorship in Fulla and a 7.9 per cent interest in the Rind discovery. These licences are envisaged to potentially be developed by 2020. 

The purchase price is USD 175.8 million.

Gas currently being produced from the fields is handled by Centrica at market based terms.
 
Pawel Olechnowicz, President of Management Board of Grupa LOTOS S.A. commented: "This investment shows our commitment to build a strong foothold on the Norwegian Continental Shelf and represents a step-change for LOTOS. The acquisition is in line with our strategy to secure additional upstream assets to balance Grupa LOTOS’ exposure in the downstream activity."

The agreement will be effective as of 1st January 2013 and subject to customary approvals by the Norwegian authorities.

*The reserves (2P) and the resources (2C) are in compliance with the international classification system of SPE (Society of Petroleum Engineers).

                               Production Licenses                                      Interest     

Grupa LOTOS ranks among the largest companies in Poland

It is an oil company engaged in the business of production and processing of crude oil, as well as wholesale and retail sale of high quality petroleum products. Grupa LOTOS is a producer and supplier of a number of products, including unleaded gasoline, diesel oil, diesel oil for heating purposes (light fuel oil), aviation fuel and heavy fuel oil. It also specialises in the production and sale of lubricating oils and bitumens.

LOTOS Petrobaltic (formerly Oil and Gas Exploration and Production Company 'Petrobaltic') is responsible for fulfilling the aims of the LOTOS Group within the exploration and extraction of oil and natural gas. LOTOS Petrobaltic is the only Polish firm involved in the exploration and extraction of oil in the Baltic Sea. It has been related to Grupa LOTOS since 2005, when Grupa LOTOS became its majority shareholder. LOTOS Petrobaltic operates in the Polish sea area covering about 29 000 km² and its licenses for the exploration and development of fields cover 7 zones of the total area of 7 100 km². The capital group of LOTOS Petrobaltic encompasses 5 subsidiaries and affiliates.

LOTOS Exploration & Production Norge was established in 2007. LOTOS has now 24 licences, including 4 operatorships on the Norwegian Continental shelf.