Tenaz strikes deal with Shell, ExxonMobil for NAM Offshore

Tenaz Energy Corp. has an agreement with Nederlandse Aardolie Maatschappij (NAM), the joint venture in the Netherlands between Shell and ExxonMobil Corp., to acquire NAM Offshore for €165 million ($246 million).

Tenaz Energy Corp. has an agreement with Nederlandse Aardolie Maatschappij (NAM), the joint venture in the Netherlands between Shell and ExxonMobil Corp., to acquire NAM Offshore for €165 million ($246 million). The transaction should close in mid-2025, pending merger clearances and transition operations. Tenaz expects NAM Offshore to produce nearly 11,000 boe/d this year and estimates its 2P reserves at 53.6 MMboe.

Upon closing, Tenaz would become the second largest operator in the Dutch North Sea, where NAM Offshore accounts for about 20% of the sector’s gas production. It has production and exploration licenses covering a total net area of 2,415 sq km in an average water depth of 34 m and about 60 km offshore. Current production comes from six hubs and two main production areas, the joint development area (JDA) and the L02/L09 fields. The gas is mainly in Permian-aged Rotliegend sandstone at an average depth of 3,500 m.

Although production is declining, Tenaz sees workover and optimization and infill drilling opportunities, along with various exploration prospects. Capital reinvestment in the facilities has been at a low level for more than a decade, it added, with no capital investment planned for 2024. Tenaz has identified at least 30 potential development drilling locations and more than 80 exploration leads and prospects over the offshore licenses. Much of the acreage is covered by 3D seismic, with an ocean-bottom node survey acquired over the JDA in 2022 still undergoing processing.

Upon closing the deal, the company intends to embark on a workover program on the existing well stock followed over time by a phased development drilling program, and wells on the most prospective exploration prospects.  Solid offshore infrastructure is largely in place to accommodate the potential growth, it adds.

Gas produced from the JDA and L02/L09 areas is transported to and processed at the Den Helder Gas Plant on the Dutch west coast for delivery to the national grid. The produced condensate is delivered to clients on inland vessels. The L02/L09 area production is transported via the Northern Offshore Gas Transport (NOGAT) pipeline and some of the non-operated fields are produced through the Noordgastransport (NGT) system.

Upon closing, Tenaz will become operator of all three gas processing trains at Den Helder and the LoCal pipeline that feeds into it. The company will also become contract operator of the NOGAT portion of Den Helder, but with no ownership in the incoming pipeline.