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.
Today, 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.
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.
OGA says UK Continental shelf “is back”
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.”
Wednesday saw i3 Energy shares soared around 25% after it revealing that it had secured an important acreage package in the vicinity of the group’s flagship Liberator field. It represents a material extension of the Liberator field, to be referred to in the future as Liberator West.
“This provides significant additional growth potential and increases our existing full development potential resource base significantly to 80 MMBO,” said chief executive Neil Carson.
He added: “It will provide relatively low-risk, low-cost drilling opportunities to develop additional barrels in this highly productive and well-established trend."
I3 now intends to enlarge its existing field development plan (FDP) to include a drilling location capable of accessing Liberator West in the first phase. An appraisal well is planned for Liberator West in late 2018, and the well is estimated to have a 70% chance of finding commercial hydrocarbon volumes.
United Oil & Gas
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.
Acquisitive Parkmead substantially expanded its footprint via the licensing round, picking up interests in a total of five licenses (equating to nine blocks or part blocks).
The new acreage is located in the Central North Sea, Southern North Sea and West of Shetland areas.
It has secured the Lowlander oil discovery which is in close proximity to Parkmead’s Greater Perth Area hub development project, increasing group contingent resources by 29% to 95.3mln barrels oil equivalent.
Parkmead also highlighted that two awards span the highly prospective Skerryvore area, including a total of seven new prospects (three of which are stacked, meaning that multiple targets can be targeted by a single well).
In a previous phase of awards, the 28th licensing round, Parkmead gained 12 offshore blocks.
The producer, which is in the process of acquiring a package of North Sea assets from BP, has further increased its portfolio by securing three new exploration licences from the OGA.
It also has a stake in the Skerryvore project alongside Parkmead, as well as gaining stakes in two other areas.
Serica gets 20% of the Rowallan South blocks which were awarded to operator ENI. As the name suggests, the blocks are located due south of the company’s 15% owned Rowallan Prospect where an exploration well is due to be drilled later this year.
Meanwhile, Serica gains 50% of the Columbus West licence which is located to the west of the Columbus field which is presently in the planning phase of oil field development. Mitch Flegg, Serica chief executive, said the area is suited to fast-tack develop if future exploration proves successful.
Independent Oil and Gas
IOG took three licence areas (comprising four blocks in total) all of which are in ‘tie-back range’ of recently acquire pipeline infrastructure.
One block is contiguous to IOG’s Harvey field, and, as such it increases the group’s view of prospective resources for the project – adding 24bn cubic feet (BCF) to 114 BCF.
Two blocks span the Glein discovery (to be renamed by IOG as Goddard) which is estimated to host 189 BCF. And the final new block contains the Aberdonia (to be renamed Abbeydale by IOG) which is estimated to have 11 BCF.
“We made very targeted applications in the 30th UKCS Licensing Round where we saw potential to add tangible value to our portfolio, and it is very pleasing to see all three applications successful,” said Andrew Hockey, IOG chief executive.