Decipher’s Orlando field producing below expectations, Atlantic Petroleum says

Decipher Energy’s Orlando oil field in the UK North Sea, brought online in March, is producing at lower than expected rates, Atlantic Petroleum has said.

Atlantic, which in 2017 sold its 25 percent stake in Orlando to Decipher in exchange for certain revenue from the field production, said on Friday that the oil output from the Orlando field “began at a lower rate than expected.”

According to Atlantic, production over the first two months has averaged approximately 4,500 BOPD, below Deciphers’ target of 10,500 BOPD.

Atlantic Petroleum and the former operator Iona Petroleum had in 2013 sanctioned the Orlando development, with plans to develop the field as a subsea tie back to the Ninian Central Platform in the Northern North Sea.

Under the original plan, the field had been expected to go online in 2014. This, however, did not happen as Iona eventually said the financing for the field had fallen through and that the company entered administration.

Decipher then in 2017 bought Iona and its 75 percent stake in Orlando, and it also bought Atlantic Petroleum’s 25 percent stake in exchange for a certain percentage of revenue from Orlando production, and brought the field to production in late March 2019.

Related: Decipher brings Orlando field online 30 years after discovery

The company kept the development plan initially proposed by Iona, consisting of the subsea tie-back of a single horizontal production well, geosteered within the Tarbert Formation of the Brent Group, to the CNRI operated Ninian Central Platform, 11 kilometers to the southwest.

Decipher has previously said that the field is expected to produce at a plateau rate of 10,500 bopd with base case reserves of 8 MMboe.

While, according to Atlantic, the field has so far failed to reach the targeted 10,000 bopd production levels, the company is optimistic.

Atlantic said: “As it remains early in the life of the field and due to the limited operational data available to Atlantic Petroleum under the terms of the SPA, Atlantic Petroleum’s Management and Board remain optimistic that production rates will improve and progress in line with Decipher’s published production target and base case reserve estimate of 8 MMBOE.”

Under the Sale and Purchase Agreement with Decipher, Atlantic says it is due to receive deferred considerations from the sale proceeds of the first 5.0 MM barrels of Orlando petroleum after the first USD 50.0 MM in gross field revenue and an amount equalling 4.35% of the Orlando petroleum in excess of the first 5.0 MM barrels. Production from the Orlando field began on the 29th March 2019.

“Despite low initial production the Board and Management still hold the view that Orlando deferred consideration will start to be realized in the second half of 2019.”

Offshore Energy Today has reached out to Decipher seeking more info on the reported lower than expected production from Orlando. We’ll update the article if we receive a response.

Offshore Energy Today Staff

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