Paladin Resources PLC
19 March 2002
Paladin Resources plc
("Paladin" or "the Company")
£26 million acquisition of a further 7.5 per cent stake in the Njord Field and a
20 per cent stake in the Brage Field, offshore Norway
Paladin announces that its wholly owned subsidiary, Paladin Resources Norge AS
("Paladin Norge"), has signed two Sale and Purchase Agreements with the
Norwegian State, represented by the Ministry of Petroleum and Energy: the first
for Paladin Norge to acquire a further 7.5 per cent stake in the Njord Field,
increasing its overall interest to 15 per cent, and the second for Paladin Norge
to acquire a 20 per cent stake in the Brage Field.
The basic consideration for the acquisitions is 325 million Norwegian Kroner
(approximately £26 million) payable in cash on completion. The consideration is
subject to adjustments for interest, for working capital as at the effective
date of 1 January 2002 and for cash flow movements in respect of the period
between the effective date and completion, which is expected to take place
during the second quarter of 2002. The consideration will be satisfied from
Paladin's existing cash resources and bank facilities.
Paladin originally acquired a 7.5 per cent stake in the Norsk Hydro-operated
Njord Field in January 2001 through its acquisition of Petro-Canada's Norwegian
interests. The field, which lies in the Haltenbanken area, offshore mid-Norway,
was brought on stream in 1997 and in 2001 produced at average rates of some
50,000 barrels of oil per day. Oil is produced through a floating production
vessel and exported by tanker. Production is forecast to continue until at
The Norsk Hydro-operated Brage Field lies between the Oseberg and Troll Fields
in the Norwegian North Sea and was brought on stream in 1993. In 2001, the
field produced at average rates of approximately 39,000 barrels of oil per day
and some 18 million standard cubic feet of gas per day. Hydrocarbons are
produced through a single steel platform with oil and gas exported through the
Oseberg Transportation System and Statpipe respectively; production is forecast
to continue until at least 2006.
As a result of the transactions, Paladin's production in 2002, on an annualised
basis, is set to increase from some 21,000 barrels of oil equivalent per day to
around 29,000 barrels of oil equivalent per day.
Proven and probable reserves on acquisition as at the effective date of 1
January 2002 would be approximately 13.5 million barrels of oil and NGLs, and 4
billion standard cubic feet of gas. In addition, there is significant potential
for future upgrades from improved recovery, infill drilling, commercialisation
of existing gas reserves and the development of existing nearby discoveries, all
of which would extend field life.
The acquisitions are subject, inter alia, to the approval of the Norwegian
regulatory authorities and Paladin's shareholders.
An Extraordinary General Meeting of Paladin's shareholders will be convened in
due course. Further details of the transactions will be provided in a circular
which will be mailed to shareholders in the near future.
Roy Franklin, Chief Executive of Paladin Resources plc, commented:
"These acquisitions further enhance our position in Norway and highlight the
benefits of being involved at an early stage in the restructuring of the
Norwegian oil and gas industry."
19 March 2002
Paladin Resources plc Tel: 020 7534 2900
Roy A. Franklin, Chief Executive
Cuth McDowell, Finance Director
College Hill Tel: 020 7457 2020
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