Norway: VNG Hits Bue Oil

Rocksource ASA has discovered oil in the Bue exploration well. This marks the third successful well on the PL 586 licence following the Pil discovery and appraisal wells earlier this year.

Rocksource currently estimates that Pil and Bue combined have reserves of 95-175 mmboe. The unrisked prospectivity remaining in the rest of the licence is estimated by Rocksource to be significantly in excess of the mean discovered volumes at Pil. Two additional wells are scheduled to be drilled in 2015, and the PL 586 partnership has now secured rig capacity for this purpose.

Bue is a smaller field than Pil, while pressure data indicates that it is a separate accumulation. Bue reserves are currently estimated in a range of 1 to 4 million Sm3 recoverable oil and gas (6 to 25 million barrels of oil equivalent, “mmboe”) by the operator VNG Norge AS (“VNG”). Bue may be a potential satellite to a future Pil development.

The Bue exploration well (6406/12-3 A) was drilled 2.1 km northeast from the Pil discovery well 6406/12-3 S. The well encountered an 18m hydrocarbon column. Although a well test was carried out in the Pil discovery well, tests were not performed in the subsequent two wells. Extensive data acquisition programmes were carried out, however, including a fluid sample from Bue.

The Pil discovery was proven in an Upper Jurassic reservoir in spring 2014. The appraisal well 6406/12-3 B was drilled 1.7 km northeast of the discovery well 6406/12-3 A. The well encountered an 82m oil column in Upper Jurassic reservoir rocks of excellent quality. The oil water contact was encountered deeper than expected.

VNG has now adjusted its resource estimate for the Pil oil and gas discovery to between 8.8-21.1 million Sm3 recoverable oil and condensate and between 2.7-6.1 billion Sm3 recoverable gas, corresponding to 72-171 mmboe. Rocksource’s estimate for Pil remains 90 to 150 mmboe, with a mean of 115 mmboe.

CEO Chris Spencer in Rocksource, commented: “The success on Bue makes it a hat trick of finds this year and reconfirms Rocksource’s view that a significant commercial accumulation has been discovered which has the potential to be a company maker for Rocksource. Bue provides valuable add-on volumes to Pil, but the exploration prospects to be tested in 2015 are even more exciting. Rocksource looks forward to the 2015 drilling campaign which will test the substantial upside potential that remains in the licence.”

The wells 6406/12-3 B (Pil appraisal) and 6406/12-3 A (Bue) were drilled by Transocean Arctic to a depth of 3 967m and 3 656m below sea level. Both wells were terminated in the Jurassic Melke Formation. The water depth is 324m. The wells will be permanently abandoned as planned.

PL 586 is located on the Halten Terrace in the Norwegian Sea, about 33 kilometres south-west of the Njord field and its associated production facilities. Rocksource, through Rocksource Exploration Norway, holds a 15 percent interest in PL 586. Partners are VNG (Operator) with 30 percent, Spike Exploration 30 percent and Faroe Petroleum 25 percent.

Press Release, July 11, 2014