P2170 Blocks 20/5b & 21/1d (Verbier) – Licence History
Blocks 20/5b and 21/1d were awarded as a Traditional Licence in the 28th Licencing Round. The blocks lie approximately 100km northeast of Aberdeen, close to the Buchan and Tweedsmuir North and South oilfields and straddle the western end of the North Buchan Trough.
On licence award, Trap Oil Ltd., a fully owned subsidiary of Jersey Oil and Gas plc (“JOG”) was Operator with a 60 per cent. working interest of which 10.0 per cent. was carried. A Drill-or-drop election was required by 30th November 2016.
Prospectivity had been identified in the Late Jurassic and the technical studies, post- award, focused on seismic reprocessing, remapping and petroleum charge studies, enabling improved delineation and risking of the prospects.
Further to a farm out campaign undertaken in the early part of 2016, JOG and CIECO completed on the 7th October 2016 a sale and purchase agreement (“SPA”) with Statoil (U.K.) Limited (“Statoil”), a leading multinational oil and gas company, for the farm-out to Statoil of, in aggregate, a 70 per cent. working interest in UK Seaward Licence P2170, Blocks 20/5b and 21/1d (the “P2170 Licence”) located in the UK Central North Sea.
In accordance with the terms of the farm-out, JOG received a cash consideration of US$540,000 from Statoil. The balance of the US$1.2 million cash consideration, due to JOG as part of the farm-out agreement, was paid to the Company’s partners in the Athena asset, in accordance with the Company’s historical settlement agreement.
As a condition of the farm-out, Statoil funded all costs up to US$25 million in respect of the first exploration. JOG retained an 18 per cent. interest, of which 10 per cent. continued to be carried by CIECO, pursuant to a pre-existing arrangement between the parties, and CIECO retained a 12 per cent. interest.
Subsequently, Statoil confirmed to the OGA that a well to test the Verbier prospect will be drilled in 2017. Both JOG and CIECO have confirmed participation in the well. A site survey was acquired during October -November 2016 and well planning is underway.
On 27th March 2017, JOG announced an independent assessment of resource estimates in relation to UK Seaward Licence P2170, Blocks 20/5b & 21/1d has been completed by ERC Equipoise Ltd (“ERCE”).
- Mean Prospective Resources attributed to Licence P2170 for the Verbier prospect increased to 162 Million barrels of oil equivalent (“MMboe”) from 118 MMboe and the chance of success increased to 29% from 26%
- Contingent Resources relating to discovery well 20/5a-10Y identified
- Mean Prospective Resources for the Cortina prospect increased to 124 MMboe from 91 MMboe with a chance of success of 19%
On the 4th April JOG announced that Statoil has awarded a contract to Transocean Drilling UK Limited (“Transocean”) for the semisubmersible rig Transocean Spitsbergen. The Transocean Spitsbergen rig will drill the Verbier prospect as part of a Statoil operated three well drilling programme, with the Verbier well planned to be drilled in summer 2017.
On the 14th August JOG announced that drilling operations have commenced on the Verbier prospect, with the drilling programme including a provision for the drilling of a sidetrack well, dependent on the results of the initial well, expected to take up to 70 days.
On the 11th September JOG announced that the Statoil operated 20/05b-13 exploration well drilled to test the Verbier prospect had been safely drilled, reaching the planned target Total Depth of 4,267m on 10 September 2017. The well encountered water-bearing Upper Jurassic sands, deeper than anticipated. A decision on whether to drill a sidetrack would be taken after evaluation of wireline logs.
On the 18th September JOG announced that the wireline log data from the initial exploration well indicated potential for hydrocarbons to be present up dip of the 20/05b-13 well could not be ruled out. Accordingly, a sidetrack exploration well was drilled.
On the 9th October JOG announced an oil discovery in the Verbier sidetrack well, 20/05b-13Z. The well was drilled safely and within budget to the planned total depth of 3811m and a suite of log data had been acquired via Logging While Drilling (“LWD”), including pressure data.
Preliminary analysis indicates
- The well has proven a hydrocarbon accumulation in good quality sands, up dip of the water-bearing sands encountered in the initial well
- Initial Operator estimates of gross recoverable resources associated with the Verbier discovery are between 25 and 130 million barrels of oil equivalent, with a minimum proven recoverable volume, in the immediate vicinity of the wellbore, of 25 million barrels of oil equivalent
The well was plugged and abandoned and the rig came off contract on the 11th October 2017.
On the 29th January 2018, JOG announced the P2170 Licence Group had approved a work programme and budget for 2018 including an appraisal of the Verbier oil discovery and contingent well planning, including the acquisition of a site survey, to progress exploration activity on the licence area.
On the 1st March 2018 JOG announced that that Statoil had awarded contracts to Seadrill North Atlantic Drilling UK Ltd. and North Atlantic Norway Ltd. for the semi-submersible rig, West Phoenix, to drill a well on the Norwegian Continental Shelf followed by three wells on the UKCS. The West Phoenix rig is to drill the Verbier appraisal well, with the possibility for a sidetrack well, as the first of Statoil’s planned UKCS wells, in the summer of 2018.