i3 Energy PLC (AIM:I3E, TSX:ITE, OTC:ITEEF) and Europa Oil & Gas (Holdings) PLC (AIM:EOG) has reported disappointing results from the Serenity appraisal well in the North Sea.
The companies, in respective stock market statements, noted that the targeted Lower Cretaceous Captain sand - which contained hydrocarbons in a prior discovery well, in 2019 - was not present at the location.
The well did encounter more than 100 feet of other targets in the Captain sands, in various sequences, but, those were found to be “water wet”.
Serenity will now be plugged and abandoned, the companies said.
"Whilst this result is disappointing, we and Europa (having satisfied the farm-in conditions) will use the data recovered to improve our understanding of the Serenity field and the architecture and geometry of the Captain sand reservoir intervals,” said Majid Shafiq, I3 chief executive in a statment.
“The data will also improve our understanding of the extent and geometry of the oil-bearing sand found in the 13/23c-10 discovery well. This will allow us to proceed with the planning and evaluation of a preferred development option, initially focussed on the eastern area of the mapped structure around the discovery well," he added.
Europa chief executive Simon Oddie said: "Although this is a disappointing result the data gathered during the drilling of SA02 has improved our understanding of the Serenity field and we continue to interpret the well data which will help us establish a suitable development plan to maximise the value of the already discovered resources within the eastern area of the Serenity field.
“The SA02 well was drilled safely and below budget and has demonstrated how well the i3 Energy and Europa teams work together. We look forward to continuing to build on this strong relationship with i3E as we work on assessing the monetisation routes for the discovered resources at Serenity.”
Oddie added: “Europa is in a financially strong position with ongoing production generating material monthly net income. We will continue to execute on our stated strategy of pursuing new assets to build a balanced portfolio, focussing on opportunities that need further appraisal to unlock the asset value.”
The Serenity appraisal well was drilled significantly below budget and with no health, safety, environmental or lost time incidents, the companies noted. The programme is expected to cost around £10.4mln.
I3 Energy said its estimated net share of costs is expected to amount to £5.6mln, whilst Europa said it expects to pay around £4.8mln.
Europa acquired its 25% interest in Serenity through a farm-out deal with I3 in which it agreed to cover a portion of i3’s well costs.