Lime Petroleum AS, a subsidiary of Rex International Holding Limited, has announced a significant expansion of its interests in the Norwegian North Sea’s Yme Field. On 23 September 2024, Lime signed an agreement with OKEA AS to acquire an additional 15 per cent stake in the producing field for a post-tax consideration of approximately US$15.65 million. This deal will also transfer all related decommissioning costs to Lime, alongside a deferred payment of US$9.2 million due in 2027, which will be repaid in four equal tranches upon the completion of specific abandonment stages at the field.
With this acquisition, Lime will increase its ownership in the Yme Field from 10 per cent to 25 per cent, effective from 1 January 2024, and the deal is expected to close by the end of the year. The Yme Field, located in production licences PL 316 and PL 316B, lies in the south eastern part of the Norwegian sector of the North Sea, approximately 130 kilometres northeast of the Ula field, at a water depth of 100 metres.
The field consists of two main structures, Gamma and Beta, situated about 12 kilometres apart. Its reservoirs are located in Middle Jurassic sandstone within the Sandnes Formation, reaching depths of 3,150 metres. Discovered in 1987, the field began production in 1996, but operations ceased in 2001 due to profitability concerns. After a 20-year hiatus, the Yme Field was redeveloped and recommenced production in 2021.
Lime's journey in the Yme Field began in 2022 when it acquired a 10 per cent stake from KUFPEC Norway AS. This latest acquisition follows a similar strategy that saw Lime secure a 33.8434 per cent interest in the Brage Field in 2021, marking its evolution into a robust exploration and production player on the Norwegian Continental Shelf.
Currently, the Yme Field produces between 20,000 and 25,000 barrels of oil equivalent per day (boepd), following the successful drilling of development wells in the second quarter of 2024. With the new acquisition, Lime’s daily production is expected to increase by approximately 3,500 boepd in 2024.
An Independent Qualified Persons Report (QPR) by AGR Energy Services AS, dated 13 March 2024, estimated that as of 31 December 2023, the Yme Field had 39.47 million barrels of 2P reserves. Consequently, Lime's acquisition will add an estimated 5.9 million barrels to its reserves as of the effective date. Additionally, the QPR indicated 8.2 million barrels of 2C resources in the field, which translates to 1.23 million barrels net to Lime following the acquisition.
Lars B. Hübert, CEO of Lime, expressed enthusiasm about the acquisition, stating, “The Yme Field has shown positive momentum since Lime entered the scene in 2022, and we are pleased to increase our stake as part of our strategy to enhance our reserves and resource base. Our relationship with Repsol, the operator, is strong, and we are collaborating closely with them to unlock further value in Yme. We expect this acquisition to contribute positively to Lime’s cash flow in the coming years.”
The acquisition will be funded using cash on hand, meaning no additional financing is necessary to complete the transaction.