Hurricane Energy Plc (LON:HUR) has told investors that the Halifax exploration well encountered a very significant oil column, meaning the confirmation of a multi-billion barrel oil discovery is now likely.
The company says the well results support its theory that the Lancaster field and the Halifax discovery are in fact part of the same single hydrocarbon accumulation – initially being referred to as the Greater Lancaster Area (GLA).
This is a very big statement, given that the Halifax well is located some 30 kilometres from the Lancaster field.
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“We believe that the GLA is a single hydrocarbon accumulation, making it the largest undeveloped discovery on the UK Continental Shelf,” said Robert Trice, Hurricane chief executive.
A one kilometre well column
The Halifax well was ultimately drilled down to a depth of 2,004 metres and as intended it confirmed the presence of an oil column below what’s referred to as ‘structural closure’.
It was, however, a much larger column than anticipated and because of time and budget restraints it was not possible to ‘clean up’ the well and proceed to full testing. Hurricane confirmed that only a trace of formation oil was recovered to surface.
A very significant oil column was confirmed, measuring at least 1,156 metres without encountering the oil-water contact point with the oil-down-to (ODT) point determined as 1,846 metres - compared to 1,678 metres at Lancaster.
The Halifax well was suspended, to allow it to be either deepened or tested at a later date.
Hurricane says it will plan the next programme following a detailed analysis of what was a four well drill campaign – comprising two successful wells extending the Lancaster field, as well as new discoveries at the Lincoln and Halifax locations.
Hurricane is now essentially set with two large oil accumulations - one is Lancaster and Halifax, the other is believed to comprise Lincoln and the as yet untested Warwick exploration target.
Trice said: “The discovery of a 1km hydrocarbon column at Halifax validates the efforts the company undertook to acquire the licence and drill, test and log the Halifax Well through the winter months.
“Given the positive well results, the Halifax Well has been suspended to provide the company the option to return to undertake further testing as well as provide the option to deepen the well and thereby establish a definitive oil water contact.”
"The end of the Halifax Well marks the completion of the 265 days during which Hurricane has had the Transocean Spitsbergen rig on hire."
Set for early production and major upgrades
Trice confirms that at the end of the drill campaign the company now has its ‘well stock’ for the proposed Lancaster Early Production System (EPS) and he anticipates significant upgrades to the group’s resource base.
“We have now completed the well stock for our Early Production System (EPS) and in the process materially increased and de-risked the resource volumes associated with Lancaster,” he said.
“The exploration wells on Lincoln and Halifax have resulted in the discovery of extensive oil columns and we therefore expect that later iterations of our CPR will significantly upgrade our resource base on both the Greater Lancaster and Greater Warwick Areas.”
Trice highlights that a new competent persons report, looking specifically at Lancaster and the EPS, is now imminent.
That will be a significant milestone towards the final investment decision for the EPS.
The decision is slated to come in the second half or this year, potentially putting Hurricane on course for first oil production in 2019.
A further CPR is expected later, to fully take into account the vast and newly extended project area.