I will now hand it over to the speakers. Please begin.
Thank you, operator. Good morning, and thank you for dialing into this conference call regarding the acquisition of the complementary North Sea asset from Wintershall Dea. My name is Svein Liknes, I'm the CEO of OKEA. With me today, I have Birte Norheim, our CFO, and Espen Myhra, our Head of Business Development, that also will be part of the Q&A session. As you have seen this morning, OKEA announced an important step in delivering on our strategy of being a leading mid to late life operator on the Norwegian continental shelf. We provided a presentation in our stock exchange announcement at 6:00 A.M. this morning, which I will run through over the next 20 minutes. The presentation was also enclosed in the reminder at 7:30 A.M., if you have not already downloaded it.
I will allow you to fill up your coffee and remember the Q&A session after my presentation. If you move on straight to slide number three, you will see the highlights of why we are excited about this transaction. We are very pleased to announce this transaction with Wintershall Dea, which represents the significant steps towards delivering inorganic growth in line with our revised strategy, as was set out at the end of last year. Through this acquisition, OKEA establishes a new operator position, enhances the scale and diversification of our portfolio, and also strengthens our position within existing core areas.
In brief, OKEA will acquire 35.2% operated working interest in the Brage unit, 6.4615% working interest in the Ivar Aasen unit, and 6% working interest in the Nova field development, with an initial cash consideration of $117.5 million, based on an effective date on January 1st, 2022. In addition to the fixed consideration, OKEA shall pay to Wintershall Dea an additional contingent consideration based on an upside sharing agreement or arrangement subject to oil price levels and oil production performance during the period from 2022 to 2024.
The contingent consideration will be paid if the average oil price for each of the six half year periods during 2022-2024 exceed $80 per barrel, and the aggregated net oil production volumes exceed certain predefined production levels as in the Revised National Budget. The split on the upside, above $80 a barrel, is 70% net of the tax for Wintershall and 30% OKEA in 2022. For 2023 and 2024, the split is 50/50 between Wintershall and OKEA on, as I said, the price above $80 per barrel. Wintershall will also retain responsibility for 80% of OKEA's share in total decommissioning costs related to the Brage unit. I will get back to the quality assets later, but the acquisition price includes tax balances and will be financed through OKEA's existing cash and liquidity resources.
The transaction is conditional upon Norwegian governmental approval and is expected to be completed in Q4 in 2022. The acquisition will increase our production by 33% in year-end 2022, and also add 13.2 million barrels of oil equivalent in 2P reserves and 10.6 million barrels equivalents in 2C resources. We will continue the infill drilling on Brage to realize what we believe is a significant upside potential, which then again also brings me to slide number four. With the transaction, we deliver on a refresh growth strategy with an agreement holding attractive characteristics. Firstly, we significantly increase the number of fields, reserves, resources and production. Secondly, we leverage on OKEA's operator capabilities and organization while further strengthening it by a very competent and experienced Wintershall Dea team on Brage.
In addition, the new operatorship of fields gives an opportunity for OKEA to add value both through operational synergies and by extending the lifetime and increasing production of these assets. Thirdly, we are strengthening our position in the Ivar Aasen and also expanding our position in the our core area through the Nova entry. Overall, we are providing a more robust and diversified production portfolio for OKEA in this transaction. If you go to slide number five, the bottom line is that we see very attractive growth characteristics with a step change in our asset base and cash flow, which all is funded with our existing cash. In addition, we also announced our very first dividend payment and a dividend plan for 2022, as well as an offer to buy back bonds. I'll get back to this in a few minutes.
If we can move on to slide six in the deck that you have, we have summarized the transaction in more detail. In essence, we total approximately 24 million BOE in the 2P and 2C resources and adds at least 7,000 barrels of oil in additional production in 2023. If you take a step back, we held a presentation on the 28th of October in 2021, where we outlined our refresh strategy of being leading mid-to-late life operator on the NCS. If you then go to slide eight, we will illustrate how the transaction is a strong fit with our strategy of providing immediate cash flows, leveraging on our organization capabilities and creating a larger, more robust OKEA portfolio. The transaction ticks all the boxes for our strategy.
We have promised our investors to deliver profitable growth, value creation, and maintain capital discipline. This continue to be the platform for everything that we also do for the future. I will do a deep dive into our new assets. Well, I will not do a deep dive into our assets, as most of you are familiar with them already. In short, there are three high-quality oil fields, all located in Norwegian North Sea, with an expected combined net production of 5,000-6,000 BOE in 2022, and 2P field reserves of 13.2 million BOE, net 2C resources of 10.6 million BOE. The Brage and Ivar Aasen fields are producing assets, while the Nova field is expected to commence production in Q3 2022 as a subsea tieback to the Ivar platform where OKEA already is.
Production from the new portfolio is therefore expected to increase by at least 7,000 barrels of oil per day equivalent in 2023. Through the acquisitions, OKEA will become operator of the Brage field, adding another operatorship of a producing asset to OKEA's portfolio. In Brage, OKEA has identified material remaining potential and opportunity for OKEA to add value as an operator. In addition, OKEA will further increase its net interest in the Ivar Aasen field from 2.777% to 9.2385%, and strengthen our position in the core area through the Nova field. I will take you through some of the details on our asset. I'll take you through the Brage, if you then go over to slide number 10.
As mentioned, we see a solid potential in Brage, and we'll continue with the ongoing work to identify further infill drilling opportunities and potential. In addition, we will unlock synergies from the Draugen and Brage operations in terms of cost and efficiency to improve the robustness and by extending the economic field life. Additionally, we will address possibilities for reducing CO2 intensity and evaluate the opportunity to increase and/or accelerate gas production. On slide number 11, we underline that we additionally are strengthening our position in the Ivar Aasen asset, an asset which we know very well already. On the ESG side, Ivar Aasen will receive power from the Edvard Grieg platform and will, from 2022, also receive power from shore from the Johan Sverdrup platform. In addition, we see an increased production potential on Ivar Aasen.
This acquisition fully provides opportunity for us in our core area on the Norwegian Continental Shelf. Moving on to slide number 12, and then Nova. Adjacent to Gjøa, the production will commence in the third quarter of 2022 with upside reserve potential from recompletions, infill drilling and potential gas blowdown towards the end of field life. Additionally, we see potential OpEx savings from other future tie-backs coming into Gjøa. Moving on to slide number 14, we are confident that the OKEA organization's capability to transition the operatorship by building on track record and safe and efficient operations according to regulatory expectations and requirements. As you know, it's all about the implementation, and I look forward to coming back to you to report on the developments going into next year. Go to slide number 15.
Following the fulfillment of the absolute restrictions under the company's bond loans, OKEA is, for the first time, in a position to distribute dividends to its shareholders. In addition, the company's cash position is currently solid, outstanding debt has been reduced through bond buybacks, and we are announcing the transaction with Wintershall Dea, which is a significant step forward in its growth ambition without any need for any new financing. Hence, the board of directors has subsequently approved a total cash dividend of NOK 93.5, or NOK 0.9 per share, which is payable now in June. The board has also stated an intention to distribute a cash dividend of NOK 1 per share, both in Q3 and Q4 of 2022.
The total planned distribution for 2022 is NOK 301.2 million, which is 2.9 NOK per share, which is equivalent to the maximum capacity allowed under the bond loans, which was 50% of the net profit after tax from last year. If you go to slide 16, we believe this transaction delivers on our growth strategy by significantly increasing in reserves, resources and production, as well as number of fields. We provide a more robust production portfolio for the company, and the new operatorship of fields give us a potential and opportunity for OKEA to add value both on production and cost, where we see synergies estimated to between $4 million-$7 million across the OKEA-operated assets.
In addition, we leverage on OKEA's operator capabilities and organization, which is further strengthened by a very competent and experienced Wintershall team as part of the transaction. With that, I will thank you for dialing in this morning, and we will now open up for questions that you may have. Birte and Espen are with me to answer questions that you may come across with. Operator, can you please open the line for the first question?
Ladies and gentlemen, if you have a question for the speakers, please press five star on your telephone keypad. To withdraw your question, please press five star again. We will have a brief pause while questions are being registered. For the first questioner, please state your name and company before asking your question. Please go ahead. Your line will now be unmuted.
Good morning. This is Teodor from Sveriges Bank. Congrats on a great deal. I have three questions. First on the contingent payments. I didn't really get that. Will the contingent payment be a function of free cash flow? So what kind of cash flow metric? I also wonder, could you say anything more about the production levels you need to achieve to pay the contingent payments? And on synergies, you talk about $4 million-$7 million synergies. Could you specify a little bit more around where you have found those synergies? And then my final question is on dividends going forward in the long term. How do you intend to determine your dividend? Will that be a % of EPS or % cash flow? Is it? Will it be a fixed amount growing by X% given oil price on a certain level? Thank you.
Yeah. Thank you, Teodor. I will try to answer the first ones, and then Birte can cover the dividends going forward. On the contingent payment, the details therein is that in 2022, there is a split with 70% of the conditional or the kicker going to Wintershall Dea and 30% to Aker. For 2023 and 2024, there is a 50-50 share of the upside above $80 per BOE. You asked about the production level. In 2023 and 2024, there is a condition that the production volume must exceed 80% of the reported volumes in the Revised National Budget. Production needs to maintain, you know, steady and high flows to actually have this kicker activated.
On the synergies, the synergies we are seeing is within our own organization, but also mostly related to contracts, where we are then having an ability to scale up the contracts that we have and share contracts on a greater scale. In addition, we also see significant reductions in, you know, IT cost and also general overhead, which we think we can reduce by taking this organization into Aker. That's basically the upside and the synergy potential we are seeing. Passing over to Birte on the dividend question on the look ahead.
Yeah. I think what we have disclosed here, Teodor, is what we are prepared to disclose about the future of dividends. I think the important thing for us is that we are now highlighting in specifics what dividends we expect in 2022, and we're also outlining the capital allocation principles, where, as you see, we are targeting to find a healthy balance between growth and dividend payments. Dividend will be a priority for us, and it's also one of the key metrics that we use when assessing potential targets. We also remind of the restrictions that we have in the existing bond loans, which is tied to 50% of net profits.
Okay. Thank you. Just one follow-up on the contingent payments. Do you have an estimate of what that will be given the production profile from the Revised National Budget and the current energy prices?
No, we do not have those details at this point, Teodor. That's something we need to come back to.
Okay. Thank you. That's all for me.
As a reminder, please press five star on your telephone keypad to ask a question. We will have a brief pause while questions are being registered. For the second questioner, please state your name and company before asking your question. Please go ahead. Your line will now be unmuted.
Thank you for taking the questions, and congratulations on the deal. A couple of questions from me, Tom Erik from Pareto. Could you comment on the value of tax balances that follows the fields? What's the nominal value and then on those? And can you also say something on the payback time of the transaction, what you expect that to be in the current oil price environment? Maybe it has been noted earlier, but if so, please repeat what kind of volumes are implied in the contingent payments. Is it more of a downside protection or is it something that you expect to kick in and limit the contingent payments itself even if oil stays at current levels? Thank you.
Yes, I can start on that, Tom Erik. Thank you for your questions. The tax values that we are acquiring is NOK 517 million in nominal terms. Also an indication of the payback time at the current market environment is roughly about a year in our estimates.
Yeah. Your question there on the volumes as well. I don't know, Espen, if you want to elaborate a bit on the function of the contingent payments.
No, I think it's important to say that the contingent payments will kick in for 2022. We hope that will kick in. It's our upside sharing mechanism here. It's also important to note that it's related to the oil production and not the gas production as such. There will be contingent payments at least in 2022 seeing the oil price and production levels we are seeing today.
Yeah. Also your question on the volumes there, but this is based on production levels exceeding 80%. It's also, as you mentioned, kind of a protection in case of failed volumes. Obviously we don't expect that to be the case. There's also a level of protection in there.
Understand. Thank you. On a follow-up question on the 2C resources, more than 10 million barrels. Is there some low-hanging fruit there, drilling campaigns that can be sanctioned in the current environment that can lead to quite rapid conversion to 2P? Or is that more long-term upside, you think?
Well, I guess there is both. Brage is an oil field which has continuous drilling and continuous infill drilling in the asset. Turning resources into reserves is something that they are doing every day. Both for the short and also long-term, that is something that is already ongoing. That is, if you call it low-hanging fruit, but it's definitely an activity that is continuous.
Okay, thank you. That was all for me.
As there are no further questions at this moment, I will now hand the word back to the speakers.
Thank you, operator. Okay, in summary then, I thank you all for participating. I'm very glad that we are able to announce this transaction in line with our strategy. I'm also looking forward to welcome you back to our second quarter of 2022 financial report on the 13th of July in 2022, where we will report obviously our ongoing operations and also give you an update on the progress with the transaction that we have just covered. With that, I will thank you for your interest and looking forward to meet again. Thank you.