Europa Oil & Gas (Holdings) PLC (AIM:EOG) told investors it is looking forward to unrestricted production at the Wressle field later this year when gas deliveries into the domestic network begin.
The oil field in Lincolnshire is presently constrained by gas flaring regulations – it is allowed to incinerate 10 tonnes of gas per day – but, a new development plan has been submitted to the UK authorities so that gas can be sold instead of burned and oil can flow unrestrained.
At 760 to 800 barrels of oil per day (bopd), Wressle is already outperforming the original production expectations, though it has been estimated that volumes could reach 1,200 to 1,500 bopd after the gas restraint is removed.
A total of 150,000 barrels of crude have been produced since the field restarted in August.
"The well performance at Wressle continues to exceed our initial expectations and once the planned connection to the local gas distribution network is completed by winter 2022 the well will be able to produce at unrestricted rates which will materially impact the cash flows associated with the field,” said Simon Oddie, Europa chief executive.
“This will also allow the field to be further developed by targeting the contingent resources located in the Penistone Flags reservoir and I look forward to updating the market in due course with details of this work programme."
It is planned that Wressle’s gas can be monetised via a short 600 metre pipeline into the local gas distribution network. This will require both planning permission and environmental agency approvals.
The Wressle field partners expect that gas monetisation can be achieved towards the end of 2022, in time for gas sales in the coming winter.
The same gas monetisation route will be available further into the future when the partners come to develop Wressle’s Penistone Flags reservoir which is estimated to host 1.53mln barrels of oil and 2bn cubic feet of gas.
Europa has a 30% interest in the Wressle asset alongside partners Union Jack Oil and Egdon Resources which own 40% and 30% respectively.