I don't know much about Cal Energy and how they came to be in...

I don't know much about Cal Energy and how they came to be in the Southern North Sea. Given that they could become a big part of HHR's future I thought it worth some research.

Short version is they farmed into 50% of IOG in 2019, built out Phase 1 of the project, got to 1st gas but had issues with liquids handling compounded by low gas prices and to much debt on IOG's 50%. IOG went into adminstration and Cal Energy picked up the remainder of the assets in August 24 for cents in the dollar. Cal Energy could provide a similar transportation and processing option to the proposed Shell (now RR/Viaro) route.


Basic Timeline

July 19- Cal Energy farmed into IOG's Core Project for $80m and $250m free carry (plus IOG to pay CER a 20% royalty on net revenue from Phase 1). The project comprised 410 bcf of 2P+2C reserves and resources across six discovered fields.

https://www.offshore-mag.com/field-development/article/14036954/iog-joining-forces-with-calenergy-for-north-sea-hub-gas-project

March 22- First Gas

https://www.oedigital.com/news/494976-first-gas-flows-from-iog-s-saturn-banks-project-in-uk-north-sea

May 22- Followed by a number of shutdowns due to liquids handling issues.

https://www.offshore-energy.biz/uk-player-frustrated-by-production-shut-in-at-north-sea-gas-project/

which continued into 2023

https://www.offshore-mag.com/field-development/article/14288460/north-sea-southwark-well-not-performing-as-planned

Sept 23- IOG enters adminstration.

Aug 24 Cal Energy agreed to purchase IOG assets in August 24.

https://news.cision.com/iog-plc/r/update-on-sale-of-assets,c4020725Oct 24- Cal Energy have announced plans to drill at least 2 exploration wells in the Southern North Sea.

https://www.upstreamonline.com/exploration/uk-operator-plans-offshore-exploration-and-appraisal-drilling/2-1-1718513

Cal Energy is seeking gas to transport and process at their Bacton Terminals. They have infrastructure in place to provide an alternative to current Shell (now Viaro) offtake route. Cal Energy is backed by Berkshire Hathaway.

As you said previously @sergeant HHR is still the operator and they are obliged to pursue all alternate offtake routes. It will be interesting to see the reaction of Viaro to this at the JV meeting this week.