Dutch Tulip Oil preparing for future wells on North Sea project
Dutch exploration and production operator Tulip Oil has reduced its capital and operating expenditures as a response to the low oil and gas prices as well as the coronavirus pandemic, but this will not stop Tulip from taking steps in preparation for production increase at its Q10-A gas field located in the Dutch sector of the North Sea.
According to its update on Thursday, Tulip Oil has taken measures in response to the COVID-19 outbreak and the company has experienced no business interruptions and staff are largely working from home.
However, in light of the current low oil and gas prices as well as the COVID-19 pandemic, Tulip Oil said that its capital and operating expenditures had been reduced.
Tulip Oil noted that, with an average unit production cost under $10/BOE (incl. G&A), it continues to generate strong margins despite the low prices.
Tulip Oil sanctioned its operated Q10-A shallow gas field in January 2018.
The development required the installation of a 42km pipeline from the Q10-A location to the P15d platform for export. Heerema Fabrication Group built the unmanned offshore platform, which was installed offshore in December 2018.
First production from the field started about a year after the FID, in February 2019.
During the first quarter of 2020, the Q10-A field produced 198 million standard cubic meters of gas. This reflected the natural pre-compression decline from 258 million standard cubic meters in 4Q of last year. The average realized gas price was 9.9 €/MWh during 1Q compared with 12.4 €/MWh in the previous quarter.
Production continues from all four wells and the calibration of the reservoir models is being progressed in preparation for two additional future Q10 wells. Steps are also being taken to enable compression for an increase in daily production at the appropriate time.
New drilling targets
Tulip Oil continues to mature additional new drilling targets predominantly to appraise reservoirs near the producing Q10-A field.
These targeted reservoirs have been drilled historically and flowed gas to the surface, similar to Q10 before the 2015 “discovery” well.