A series of offshore UK-focused junior oil and gas on Thursday revealed details of new acreage that they have secured through the government’s 30th licensing round.
British industry regulator, The Oil and Gas Authority (OGA), on Wednesday announced the results of what it called a ‘transformational’ licensing round, in which it offered 123 licenses (covering 229 blocks or part blocks) to a total of 61 companies.
The market learned that growth companies such as United Oil & Gas Plc (LON:UOG), Parkmead Group Plc (LON:PMG), Faroe Petroleum plc (LON:FPM) and Serica Energy Plc (LON:SQZ) were among the firms landing new projects.
Upwardly mobile United landed two new exploration areas in the North Sea, one of which already contains the Crown oil discovery - found by a ConnocoPhilips well in 1998.
Crown has been estimated to contain 4-16mln barrels of oil, with the mid-case presently pitched at around 9mln barrels. United plans to conduct new work programmes to advance Crown towards a development, starting with seismic reprocessing designed to reduce uncertainties relating to estimated oil volumes and to help select future well locations.
Additionally, the company highlighted that the whole new acreage package spans some 13.6 square kilometres and contains multiple exploration targets.
The acreage was awarded by the UK authorities via the 30th Offshore Licensing Round. It represents a material extension of the Liberator field, to be referred to in the future as Liberator West.
OGA says UK Continental shelf “is back”
The OGA said that this latest phases of acreage awards would act as a strong platform for future exploration and production across the UK Continental Shelf.
Moreover, the regulatory stated its expectation that the round would “lead very quickly to activity” and that would provide a boost to exploration.
Altogether, the OGA secured commitments from oil and gas groups to drill at least eight new exploration or appraisal wells, as well as nine new 3D seismic survey shoots.
Significantly, a total of 14 new licenses are expected to see projects proceed directly to field development planning, the OGA added.
The OGA estimated that the round may unlock a dozen currently undeveloped discoveries, representing some 320mln barrels oil equivalent whereas the exploration potential within the new blocks was estimated in the order of 3.6bn barrels oil equivalent.
“The UKCS is back. Big questions facing the basin have been answered in this round. Exploration is very much alive with lots of prospects generated and new wells to be drilled,” said Andy Samuel, OGA chief executive.
“The results show a great diversity of active players from super-majors to new entrants, and the hard work promoting undeveloped discoveries is starting to pay off. I’m looking to industry to rapidly press ahead with these activities and maximise recovery from these great opportunities.”
Europa Oil & Gas (Holdings) Plc (LON:EOG)
As Europa Oil & Gas narrows its focus in on the Inishkea prospects, in the vicinity of Ireland’s Corrib gas field, it has decided to relinquish a portion of its portfolio. The explorer, in a stock market statement, revealed that it will give up offshore Licence Option 16/21 which covered an area in the Slyne basin, off Ireland’s West Coast.
It said that following initial exploration work the company sees limited potential in the 16/21 area, and, its judgement is that the asset block would compare poorly with other exploration areas in Ireland’s Atlantic Margin.
As such it believes it would be difficult to attract third party fund to a project in the 16/21 area.
Europa retains interests in six licence areas offshore Ireland, with potential undiscovered resources estimated at around 4.7bn barrels oil equivalent. The priority is focused on Licence Option 16/20, also in the Slyne Basin, which hosts the Inishkea prospects.
Here, Europa is working to advance the exploration prospects to ‘drill ready’ status. To that end, it recently began 3D seismic reprocessing, which is due to be complete in the fourth quarter – and it will be followed by planning for a well programme and a farm-out partnering process.
The Argentina focussed explorer is raising £8.5mln of new capital though a share placing and subscription as it plans to accelerate its operations in Argentina.
It is issuing 71.18mln new shares, priced at 12p each. Echo highlighted that following the successes and given attractive contractor rates it is bringing forward a planned 2,000 square kilometre seismic campaign for the Tapi Aike exploration area.
"The team remains busy on several fronts; however, focus is now clearly on the imminent recommencement of production testing at the Icewine-2 well,” said Dave Wall, 88 Energy managing director.
The group’s 3D seismic exploration campaign is advancing on schedule.
SDX Energy Inc (LON:SDX, CVE:SDX)
SDX told investors that the Kelvin-1X exploration well at South Disouq, in Egypt, has been unsuccessful. It follows two successful discoveries in the South Disouq block.
The company, in a statement, said that the well encountered 606 feet of high quality reservoir but it had low gas saturation and was not deemed to be commercial. Subsequently, the well will be plugged and abandoned. Another well will now follow. The rig will move into the position for the SD-4X appraisal well.
"The results of the Kelvin-1X well are not commercial and will not contribute to the initial production in this first phase of the development at South Disouq,” said Paul Welch, SDX Energy chief executive.