Corallian’s well costs go up over increased oil price
Cost estimates for two Corallian Energy-operated wells located off the UK have gone up due to increased oil price, affecting rig fuel costs.
Corallian has been preparing to drill the Colter and Wick wells and has recently entered into a letter of intent with Ensco for the provision of a jack-up drilling rig.
The Colter and Wick wells are located in licenses P1918 (UKCS Block 98/11a) and P2235 (UKCS Block 11/24b), respectively. Corallian is the operator of both licenses and Baron Oil is its partner with a 15% interest in the Wick license and 5% in the Colter license.
Baron Oil informed on Wednesday it has received revised costs estimates for each of the Wick and Colter wells and that these have increased as more bids for services are received, due to increases in the cost of fuel for the rig and tugs and the requirement for more comprehensive sea bed surveys.
Detailing the increase, Baron said that the revised estimate for the Wick well cost, on a dry hole basis, has increased from £4.2 million to £5.2 million (£990,000 to Baron Oil, previously £840,000) and the revised estimate for Colter, also on a dry hole basis, has increased from £6.4 million to £7.2 million (£480,000 to Baron Oil, previously £425,000).
Reduction in Colter prospective volumes
Corallian has also provided the results of its new probabilistic evaluation of the resource potential of the Colter prospect, based on mapping the reprocessed pre-stack depth migrated (PSDM) volume of the combined 3D seismic surveys over the area.
These results indicate Mean Prospective Resources of 22 million barrels of recoverable oil and a further 1 million barrels of oil equivalent as gas, compared with the previous estimate of unrisked P50 Prospective Resources of 26.8 million barrels of oil recoverable, as announced on 6 March 2018.
New preliminary mapping of a separate area around the 98/11-1 well, south of the Colter prospect, suggest the potential for Prospective Resources of up to 27 million barrels of recoverable oil. Further definition of this separate area will be possible once the results of the Colter well (98/11a-E) are available.
Malcolm Butler, Chairman & CEO of Baron Oil, said: “The increase in well costs result from the increased oil price, affecting fuel costs, and because the operator has taken the view in the case of both wells that a more detailed survey of the sea bed is advisable, given the planned use of jack-up rigs.
“The completion of the PSDM has enabled the structural configuration of the Colter prospect to be better delineated, with a slight reduction in prospective volumes.
“However, this has also enabled the mapping of an additional, separate closure up-dip from the 98/11-1 well, which also had oil shows at the top of the Sherwood reservoir.
“Both Colter and Wick are exciting prospects, lying close to known oil accumulations, and we look forward with eager anticipation to the results of drilling towards the end of this year.”