Valiant Petroleum Plc, the U.K. oil explorer focused on the North Sea, plans to expand drilling off Norway after buying assets and qualifying as a field operator.
“Our focus is very broad,” Chief Executive Officer Peter Buchanan said in a phone interview. “Our spread in Norway covers everything from the Norwegian North Sea through the Norwegian Sea into the Barents Sea.”
The company agreed on March 19 to pay 11.5 million pounds ($18 million) to Rocksource ASA for assets in the Barents and North Seas. Last year, it acquired Sagex Petroleum ASA, with interests off Norway, for 7.1 million pounds.
Valiant, based in Woking, England, plans to invest $250 million to $300 million in projects this year and pump as much as 8,000 barrels of oil equivalent a day, depending on first production at the Causeway field due in the second half. The company said today in a statement that it paid off its debt last year and tripled its profit after tax to $103 million.
The explorer anticipates the possibility of rising industry investment in the U.K. North Sea, as well as drilling and assets trading following tax changes in the government’s budget.
“I am hoping that we will see an increase in investment and an increase in activity,” Buchanan said. “We need more wells drilled, and we need more discoveries, and need to be able to take these discoveries quickly into production.”
Chancellor of the Exchequer George Osborne last week offered tax allowances for U.K. North Sea fields with resources not exceeding 50 million barrels of oil and gas. He also promised to guarantee tax relief for dismantling aging facilities. The decision was welcomed by North Sea producers such as BP Plc, EnQuest Plc and Premier Oil Plc.
“The future for the North Sea is substantially in fields of less than 50 million barrels,” Buchanan said. That would be “a decent size” field, with average discoveries holding about 20 million equivalent barrels of oil and gas, he said.