Enegi: Phoenix field has strong potential

Enegi today said that the Phoenix Discovery in the Central North Sea has strong potential to be a technically and economically viable project.

The work programme, pursuant to the terms of the Farm-in agreement entered into with Azimuth Limited and announced on 11 February 2013 (the “FIA”), is nearing completion. Azimuth Limited’s appointed affiliate, Strike Oil Limited (“Strike”), has obtained 3D seismic and well data and has performed detailed subsurface analysis of both the Phoenix Field and exploration prospects within the licence area.

Enegi says that the results to date are very encouraging, as seismic and local well studies are able to resolve and prove the presence of oil bearing Forties reservoir around the previously drilled 22/12a-10 exploration well. This means the target has effectively been de-risked, with minimum case reserves being identified within a four-way dip-closed depth structure. The Partners’ efforts are now focused upon resolving the volume of oil contained by the stratigraphic closure in the surrounding area.

Based on the results of the subsurface studies, Enegi undertook an assessment of the suitability of developing the Phoenix Field with either a Self-Installing Floating Tower (“SIFT”) or a Production Buoy, concluding that that the SIFT solution is able to provide the most appropriate technical and economic development solution for the field. The development scenarios being considered include the number of production wells and possible requirements for water injection, the environmental conditions at the location of the field, the hydrocarbon characteristics and resulting topside facilities required to handle the production. The Phoenix Field is a Palaeocene aged Forties sandstone and is situated between the Nelson and Montrose fields where the hydrocarbon systems and types are well understood providing analogue data that will assist in the preparation of field development studies.

The engineering work being completed for the Fyne Field will also provide a significant benefit in advancing the Phoenix Field development studies. The Company expects that the process engineering can be adapted and, as the water depth is similar, the SIFT structural design can be re-used to reduce the time and cost of engineering work, leveraging prior investment in the solution.

Further subsurface work will be completed over the coming months and is focused on determining that there is sufficient proven oil in place to justify the next stage of investment that may include the preparation of a Field Development Plan.

“The Company believes that the work completed to date warrants this further investment and, based on analysis to date, that the Phoenix Field has strong potential to be a technically and economically viable project,” Enegi said in a statement.

Upon fulfilling their obligations under the FIA, Strike, a subsidiary of Azinor Petroleum Limited (a Group of which Azimuth Limited is also part), will earn a 50% interest in the exploration acreage on this Block. Enegi will retain the remaining 50% interest and also hold a 100% interest in the Phoenix Field acreage, as well as being operator, on the Block.

Alan Minty, CEO of Enegi, commented: “We applied for licenses in the 27th Round in order to build a portfolio of marginal field development options that we could take forward in ABTOG. Block 22/12b, containing the Phoenix Field, had significant potential and the results, at this stage, are highly encouraging. We look forward to progressing work on the Phoenix Field along with our continued work on the Fyne Field and on the North Celtic Sea fields. We also hope to add to ABTOG’s portfolio through the 28th Licensing Round where we have applied for licences on a number of undeveloped discoveries and in addition, via other commercial transactions being considered.”