Is there ever a good time to list on the stock market? Bridge Energy hopes so.
By the end of this month it hopes to have carried out a successful entry onto London’s Alternative Investment Market.
By then it will also be participating in three exploration wells, mostly off Norway, increasing to four in early October, as well as working up plans for two development projects, including an unexpected potential new platform development in the southern North Sea.
It’s a busy, but good, time says Bridge Energy’s chief executive Tom Reynolds.
“Our story has matured,” he says. “The business is now better funded, we have better cash flow, diversity of production, more and more exploration licenses and it really feels like we are gathering momentum.”
Bridge formed out of a combination of Norwegian firm Bridge Energy and Silverstone Energy in 2010.
It’s plan is to grow its production from a current under 2,000 barrels of oil equivalent per day (boepd) to about 12,000 boepd by 2016, through a combination of new developments and acquisition.
Its core assets are a small but significant stake to it in the UK/Norway cross boarder Boa field, a 50% stake in the Duart field, tied into Talisman’s Tartan platform and its operated Victoria fields.
Key to the firm’s short term growth had been an increase in production on its southern North Sea Victoria fields.
Victoria phase II, a subsea development well tied back to existing infrastructure, was going to bring a relatively significant boost to production in 2014, to be followed by two projects on the nearby Vulcan area, Vulcan North West and Vulcan East.
However, Reynolds said time and money – and a new opportunity – made them think again.
The time taken to secure a rig, the Ensco 92 for the back end of 2013, meant costs had risen on Victoria phase II – due to higher costs for going over the host platform (Viking) and rising rig rates – which undermined the project’s economics.
Meanwhile, the discovery of an additional gas structure in the Vulcan area made the joint Vulcan fields, North West, East and now South, added up to significantly more than the Victoria Phase II development they had been targeting.
In fact, the firm is now looking at the possibility of having to bring in a platform for the development, which will chase 70billion cu ft of 2P reserves and 180-260billion cu ft of contingent reserves – all 100% operated.
“We asked ourselves is there a way we can put a bigger plan together and bring all this gas to market,” said Reynolds.
“Not being able to get after Victoria phase II was disappointing but we have got to allocate our capital wisely. With the rig secured for Victoria we were able to look at other good uses for it.”
The Vulcan area development is looking like having two wells on Vulcan east, three on Vulcan North West and a well on Vulcan south, all linked in to BP’s LOGGS platform (due to transfer to Perenco).
“We think the volumes will be big enough to justify a small dedicated well head platform as a gathering station,” said Reynolds.
“It makes the wider area development possible.”
Intriguingly, Reynolds suggests this could be done by recycling existing infrastructure in the area. The Vulcans are similar reservoirs to RWE Dea’s successful Clipper South field, in tight Rotliegendes sandstones needing to be fractured.
To replace what had been hoped to be new production from Victoria phase II the firm is hoping to make another acquisition, adding to Boa and Duart, both made this year.
Another prospect for Bridge is additional oil at Duart, with Talisman considering a prospect to the east of the field and a viable development to the south of the field.
But in the immediate future, exploration is keeping Bridge busy. It is currently a partner (20%) in Total’s Garantiana exploration well in the Norwegian North Sea and the (4% owned) Contender prospect being drilled by Taqa of its Cormorant North platform in the northern North Sea.
September will also see it taking part (30%) in exploration drilling on Det norske oljeselskap Geite’s prospect and Wintershall’s PL457 Apollo/Draupne prospect (20%).
“We have matured, gather and gained momentum in the last 15 months,” adds Reynolds.
“It is a positive time to go to the market. We have a portfolio with lots of options and we are growing our balance of oil and gas.”
Tom Reynolds: Questions and Answers
1st class honours degree in Chemical Engineering from Strathclyde University, Glasgow
The main roles in career and dates:
1997-2000, Total Oil Marine, commercial roles, gas department and acquisitions/disposals; 2000-2002, BP, commercial role, West of Shetland business unit; 2003-2004, 3i, investment executive, oil and gas team: 2004-2008, Energy Development Partners, commercial director and chief investment officer; 2008-now, Bridge Energy/Silverstone, commercial director, chief executive
What has been the hardest decision you have made in business?
There have been many hard decisions and it is difficult to single one out. For me, the hardest decisions involve choosing not to pursue an opportunity despite the time, effort and capital which may be invested to date. The temptation is always to keep going – maintain the status quo – but if a project or initiative no longer looks like delivering you have to stop and move on to the next opportunity.
Who do you admire in business? Or Who has inspired you most in your career?
I would prefer to talk about admirable traits rather than individuals because I have had the opportunity to work with and observe so many capable people. I admire people with integrity who fully commit to their objective and persevere despite the inevitable bumps in the road. I also respect people with vision – who look over the horizon and identify future opportunities before they become obvious.
What do you regard as being your greatest success to date?
Over the past eighteen months the Bridge team and I have made excellent progress to grow our business, broadening its portfolio and increasing its ability to invest in a wider set of opportunities across the E&P spectrum. We have also prepared the business to be listed on AIM in London in addition to our current listing in Oslo. It involved a lot of hard work and focus but I think we’ve established a solid foundation and believe we have an interesting set of opportunities to build on this.
What do you do to relax?
I have a young family so doing things at home with the kids provides a great antidote to the stresses of work. The veg patch is a great favourite.
What is your favourite gadget?A corkscrew. Low tech but often mission critical.