Page 14 - Euroil Week 11 2020

EurOil PROJECTS & COMPANIES EurOil
Total strikes gas in North Sea
FRANCE
Total has extended its recent period of exploration triumph.
FRANCE’S Total has continued its strong track record of North Sea exploration, reporting a new discovery off the UK on March 17.
The gas and condensate find was made at the Total-operated P1820 licence in the central North Sea, some 40 km south of the oil major’s Elgin-Franklin gas condensate field, in waters 80 metres deep. A 64-metre net pay of lean gas, condensate and light oil was discovered in Upper Jurassic and Triassic sandstone reservoirs, the company said.
Well data is being analysed to assess the find, known as Isabella, and determine a programme to appraise it, Total said.
“The initial results at Isabella are encourag- ing,” Total’s senior vice-president for exploration, Kevin McLachlan, commented. “This demon- strates that our exploration strategy in the North Sea to explore for value-adding prospects nearby to our infrastructure is working.”
Total has a 30% interest in P1820, while Nep- tune Energy has 50% and Ithaca Energy and Edi- son have 10% apiece.
Neptune CEO Jim House said the discovery showed “significant promise”, noting that Isabella was a high-pressure, high-temperature field like Elgin-Franklin.
“Total has extended its recent period of exploration triumph. Non-operated success
at Glengorm and operated success at Glen- dronach sees the company lead the table of net UK discovered resources in recent years,” Wood Mackenzie analyst Glenn Morrall commented. “But Isabella’s high-pressure, high-temperature nature will add complexity and cost to any development, and its progres- sion is likely to be put on the backburner at current prices.”
On the other hand, its close proximity to existing infrastructure means the discovery could be judged commercial if market condi- tions improve, Morall explained.
“[Total’s] experience in developing big HP-HT gas/condensate projects in UK waters, such as Elgin-Franklin and Culzean, will no doubt stand it in good stead,” he said.
Total and its partners were not the only com- panies to strike hydrocarbons in the North Sea this week. Hungary’s MOL reported on March 18 that its Norwegian subsidiary had discovered more oil and gas at its operated 820S licence, in the Norwegian part of the sea. It estimates the size of the find at between 12 and 71mn barrels of oil equivalent (boe).
MOL has a 40% interest in the licence. Its partners are Sweden’s Lundin Petroleum with 40%, and Germany’s Wintershall Dea and Nor- way’s Pandion Energy each with 10%.™
UKOG cleared to push ahead with Horse Hill
UK
Horse Hill was dubbed the Gatwick Gusher after flowing at a higher rate than any other UK well.
SHARES in London-listed juniors UK Oil & Gas (UKOG) and Alba Mineral Resources surged on March 13, after the pair’s development plan for the onshore Horse Hill oilfield secured regula- tory approval.
The Oil and Gas Authority (OGA) has signed off on the plan and given permission for pro- duction to start, UKOG said in a statement on March 13.
UKOG owns an 85.6% stake in Horse Hill, situated near London’s Gatwick Airport, as well as the surrounding PEDL 137 and PEDL 246 licences, while Alba has 11.8%.
The OGA’s approval will enable UKOG to add net recoverable reserves to its books – a prereq- uisite for future potential debt-based funding. It also paves the way for the company to enter into long-term field operations contracts. UKOG said this would help cut operating costs to below $19 per barrel, making the field more profitable despite current low oil prices.
UKOG CEO Stephen Sanderson said the
regulatory clearance meant the company “can now focus firmly upon maximising stable pro- duction, reducing operating costs and generat- ing positive cash flow.”
Horse Hill was dubbed the “Gatwick Gusher” in 2016 after a well flowed at a stable rate of 1,528 barrels per day (bpd) – the highest flow rate of any onshore wildcat in the UK. UKOG estimates the find to contain 21mn barrels of oil in place (OIP) under a best-case scenario.
Production at the Horse Hill-1 discovery well will now commence from the Portland oil sand- stone, UKOG said. Oil located in deeper Kim- meridge limestone will be brought on stream in late spring after the well is converted to a dual completion. Production at the HH2Z well near Horley in Surrey is slated to start after the current extended well-testing campaign is completed, UKOG explained.
Shares in UKOG were trading 20% higher at GBP0.045 ($0.055) on March 12, while stock in Alba was trading 21.4% higher at GBP0.085.™
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