Rig capacity may constrain planned surge in UK E&A wells
In 2007, Hannon Westwood assisted many international and UK based clients to focus on farm-in and farm-out opportunities through a combination of client workshops, consultations, and bespoke reports generated from drilling down into the firm’s proprietary intelligence database. These activities played a part in the successful conclusion of a number of transactions that might not otherwise have been obvious to either side of the farm-in deal.
Forecast well count
Hannon Westwood has scout intelligence on 184 E&A wells that currently are scheduled for spud during 2008 and 2009, although the current rig market cannot support such a population and indications are that there is a very competitive market for rig slots. This total compares strongly to the 61 E&A well spuds during 2005, 55 E&A well spuds during 2006, and the 69 E&A spuds during 2007. By end-June this year, 42 E&A wells had been spudded, a significant increase on last year, suggesting that 2008 could bring close to 90 E&A well spuds.
Of this total, 89 planned wells are in traditional joint ventures, with a further 25 wells already fully funded through farm-in agreements and 12 partly funded through farm-in agreements. In addition there are a further 58 wells that will be fully offered for farm-out, mainly by independents seeking to fully fund their portfolio of proposed wells. Of the wells where some farm-in funds are still required, 23 are on Promote or Frontier licenses.
Of the 184 wells lined up for the next two years, 49%, or 90 wells, are planned for the central North Sea and 27%, or 52 wells, for the gas basin. The upturn in activity in the West of Shetlands/West of Britain areas has continued in the east Irish Sea, as operators there prepare for a concerted drilling campaign, probably in 2009. However, the number of wells planned for the West of Shetlands has decreased as a result of several relinquishments in late 2007 following pressure to meet Fallow and Frontier license commitments – and also because a continuing drilling campaign has reduced the outstanding well list.
Last year, 82 companies participated in 70 well starts in the UKCS, with the West of Shetlands the biggest “winner” in terms of reserves added. The move by the majors to tap the greater materiality in this region resulted in this area contributing the greatest volume of exploration reserve additions and appraisal reserve progression for any one area — about 942 MMboe.
Well results, however, have been kept tight generally, so this figure is perhaps more speculative than for other more established areas of the North Sea. Total recorded a wildcat success with Tormore, and appraisal continued at the Chevron-operated Rosebank/Lochnagar and on the Clair Ridge, where significant potential is likely.
Previous Page
|
Next Page
Page 2 of 3
Volume 68 Issue 8
August 2008
Add RSS Feed