Spring Energy was founded in October 2007 as an oil and gas company focused on the exploration and appraisal of mature and immature areas of the Norwegian Continental Shelf (‘NCS’).
The Company’s first full year of operations was highly active, both operationally and financially. It established a core team of experienced management and staff with a high level of technical and commercial competence and excellent industry contacts. After becoming pre-qualified as a licensee on the NCS, it developed a substantial portfolio of 9 exploration and appraisal licenses through acquisitions, farm-in transactions and licensing rounds. During the year, the Company also secured substantial equity funding from HitecVision, a private equity company with a track record of making sound investments, and established a revolving exploration loan facility with a group of international energy-focused banks.
This rapid pace of development continued throughout 2009 when 11 further licenses were added to the Company’s portfolio bringing the total number of licenses at the year end to 20. Considerable exploration success was achieved on two licenses, PL378 and PL 375 where oil and gas discoveries were made in the Grosbeak and Beta prospects and PL407 the Bream discovery was appraised. Later that year, the company swapped a portion of the Grosbeak discovery for a 2.5% interest in the producing Brage field and an attractive exploration and appraisal portfolio. At the year end the Company had booked contingent resources of 30.9 mmboe, up 197% from the previous year. During the year the Ministry of Petroleum and Energy pre-qualified Spring Energy as an operator on the NCS.
2010 marked a further significant milestone in the Company’s development when it locked in the value of some of its exploration discoveries through a major asset sale to Talisman Energy Norway AS. It also recorded significant exploration success when a substantial oil and gas discovery was made in the Maria prospect. An additional 4 licenses were added to its portfolio in the APA 2009 award and a further 5 licenses were awarded in the APA 2010 award, including two as operator. After further acquisitions and allowing for disposals, the total number of NCS licenses in its portfolio at the year end was 19. The Company returned a profit for the second year running and benefited from the continued support of its financial backers, HitecVision and its syndicate of banks, who both increased their financial commitment.
In the year to date, the Company has continued its successful strategy of portfolio management with a focus on exploration and development opportunities. At the start of the year it was awarded 5 further licenses in the APA 2010, including 2 as operator, and 2 licenses in the 21st Licensing Round. In May, it announced the sale of its interest in licenses PL475, PL475BS and PL475CS, containing the Maria discovery, to Wintershall Norge ASA. It also acquired interests in two further licenses located in the Barents Sea, PL438 and PL490, bringing the total number of licenses in its portfolio to 28.
The Company is fully funded and is currently participating in an active 18 month exploration and appraisal programme that will target risked resources of more than 67mmboe. A total of 6 wells will be drilled in 2011.
Spring Energy was the winner of the Rystad Energy “Newcomer of the Year” award for 2008 and “Business Developer of the Year” award for 2009.