Lime Petroleum Norway has decided to surrender three licenses located in the North Sea, following the deadline for a drill or drop decision by 23 July.
The decision to surrender PL509S, PL509BS and PL509CS follows the assessment of results obtained from reprocessed seismic data, the application of Rex virtual drilling (RVD) and electromagnetic surveys (EM).
While reprocessed seismic data showed thin marine channel deposits that would be challenging for confident mapping, EM surveys failed to reveal significant enough deposit to advance further.
RVD analysis, however, highlighted the presence of anomalies, but these were deemed not of sufficient size to be attractive.
The assessment forced the licenses operator, North Energy, to propose to its partners to bow out from holding on to their interests in the licenses.
Lime Norway’s other partners in the licenses include Fortis Petroleum Norway and Rocksource Exploration Norway.
Despite the relinquishment of three licenses, Hibiscus Petroleum continues to hold various levels of equity in 13 licenses in Norway.
The relinquishment is not expected to exert any material adverse effect on Lime Norway, a jointly controlled entity of Hibiscus Petroleum and Rex International, in the wake of the attractive fiscal terms offered by the Norwegian Petroleum Tax Act.
The Norwegian Petroleum Tax Act allows for annual reimbursement of 78% of eligible exploration expenditure, irrespective of whether production is achieved.
Lime Norway has received adequate funding to fulfil their work commitments next year, after receiving $23m in capital injections from its shareholders in November 2013 and January 2014, as well as securing $48m from Skandinaviska Enskilda Banken.