Alba Mineral Resources PLC (LON:ALBA) executive chairman George Frangeskides is looking forward to “a key step” towards commercial production and significant cash flow as the Horse Hill oil project moves closer to its next phase.
A series of stock market statements, from the clutch of oil companies invested in the project, informed investors that the Horse Hill operating vehicle, HHDL, has confirmed that the programme will get underway “in late winter 2017/18”.
The programme, which includes a 150-day production test and new drilling, is designed to confirm the commerciality of the Portland and Kimmeridge oil discoveries. It will also set up the project for the start of long term production, targeted in early 2019.
“We are pleased that, together with our consortium partners and the operator HHDL, we have now clearly mapped the path towards commercial production at Horse Hill,” Frangeskides said in a statement.
“The execution of this programme in 2018 will be a key step towards delivering the goal of commercial production and significant cash flow at Horse Hill."
Long term production testing
First the existing well will be tested for production, starting with the Portland zone – which flowed at a rate of 323 barrels of oil per day previously - before the KL3 and KL4 Kimmeridge zones are tested.
Each zone is to flow for 30 to 40 days. It will see sequences of steady state production and shut-in periods, this will be done to help establish how much of Horse Hill’s oil-in-place is directly connected to the well.
It is also planned that a short maximum rate flow test will take place for each reservoir, and, schedule permitting, previously untested deeper Kimmeridge zones may undergo short-term tests.
After that, it is planned that the Horse Hill 2 appraisal well will be drilled, likely by summer 2018.
The well is being planned with ‘optionality’ to deepen into the Kimmeridge and could also be deviated northwards to access the Portland in the Collendean Farm fault block (where significant oil-in-place is seen).
It is now anticipated that the new sidetrack to the first Horse Hill well will now move into the schedule for 2019, once a new Kimmeridge reservoir model has been developed using the longer term production test data, in addition to the well data from Broadford Bridge and Horse Hill 2.
A new planning application for long term oil production is due to be submitted to the authorities by late spring 2018.