Equinor finds ‘high-value barrels’ in North Sea
Norwegian state-owned giant Equinor has made a significant hydrocarbon discovery with excellent reservoir quality in the Kveikje exploration well, located in the North Sea offshore Norway, which exceeded pre-drill expectations.
The primary prospect in licence PL293B, Kveikje exploration well – 35/10-8S – was spud at the beginning of March 2022, using the Odfjell-owned Deepsea Stavanger semi-submersible drilling rig. Prior to the spudding, Equinor secured a drilling permit from the Norwegian authorities for two exploration wells, including this one, in February 2022.
Located in an area north of the giant Troll field in the Norwegian North Sea with many producing fields and significant infrastructure, the licence containing the Kveikje prospect is operated by Equinor while DNO Norge, Inpex Idemitsu, and Longboat Energy are its partners.
One of these partners, Longboat Energy with a 10 per cent stake in the licence, revealed on Tuesday that Equinor had made a significant discovery in the Kveikje exploration well. The preliminary estimate of recoverable resources in Kveikje Main, being the primary target of the exploration well, is 28 to 48 MMboe (gross), above the pre-drill expectation.
The company says that this discovery has excellent reservoir quality and is close to existing infrastructure allowing for a simple development through multiple export options. The Kveikje well, which is now being plugged and abandoned as planned, reached a total vertical depth of 2,078 metres below sea level.
Helge Hammer, Chief Executive of Longboat, commented: “Longboat is very pleased to have made a significant commercial discovery in the Kveikje well. Excellent reservoir quality, close proximity to infrastructure and multiple development options make this an important and valuable resource and we look forward to working with the operator to mature the forward plan. We believe that this is an asset that can be commercialised via either development or transaction given the high-value barrels that we have discovered.”
Longboat further elaborated that a comprehensive and successful data acquisition programme was completed over the Kveikje Main and Hordaland reservoirs. This entailed Logging While Drilling, Wireline Logging, Fluid Sampling and Coring, while the data has been used for the preliminary evaluation of the discovery.
Moreover, the firm confirmed that neither the gas-oil contact nor oil-water contact were penetrated in Kveikje and fluid contacts have been estimated using pressure data from the well and aquifer pressure data from nearby wells.
According to Longboat’s presentation, Kveikje Main has excellent reservoir properties and the preliminary on-site analysis of the oil indicates a medium-density oil – 30-40 deg API – while the gas discovered in the overlying Kveikje Hordaland is interpreted to be in communication with the main reservoir and represents upside potential to the Kveikje development. In addition, the gas cap could contribute to a higher recovery factor through pressure support during the production phase and subsequently be a target for production.
When it comes to the deeper secondary prospects – which did not form part of the pre-drill estimates – indications of sand with hydrocarbons were encountered both in the Palaeocene Rokke and in the Cretaceous N’Roll. While Rokke was reached at a vertical depth of 1,877 metres below sea level and penetrated a c. 3 metres of sand, N’Roll was reached at a vertical depth of 1,997 metres below sea level and penetrated multiple sand stringers.
Longboat also informed that Logging While Drilling and Coring were accomplished over the deeper secondary targets, but due to operational concerns towards the end of the drilling operations, the planned Wireline logging over these sections could not be performed. Therefore, the evaluation of Rokke and N’Roll is based on an incomplete data set and further appraisal will be required to reach a conclusion on the size and commerciality of these potential additional resources.
The Kveikje well was drilled 40 km from the Troll B field and 32 km from Troll C, which are potential host facilities, based on Longboat’s statement. Thus, Kveikje could form part of possible cluster development tied back to Troll B.
The oil and gas player highlights that the Kveikje discovery will be evaluated as part of potential Equinor-operated area development. This development could comprise numerous recent discoveries in the area, including Toppand, Swisher, Røver Nord, Echino South and Blasto, as well as the undeveloped Grosbeak field, Longboat said.
To remind, Longboat Energy reached an agreement in June 2021 with three separate companies to acquire an exploration drilling programme offshore Norway structured as three farm-in transactions. Through these transactions, Longboat gained access to a seven-well exploration programme in Norway, which has resulted in three discoveries – Egyptian Vulture, Rødhette and Kveikje – out of five wells drilled to date.
“Kveikje is the fifth well and third discovery in our seven well drilling campaign. The rig will now move to the nearby Cambozola well where we have a 25 per cent working interest. Cambozola is a play opener and one of the largest gas prospects to be drilled in Norway in 2022 and mid-year we expect to spud Copernicus, another very large gas prospect,” added Hammer.
The company’s remaining two exploration wells – excluding appraisal drilling on the existing discoveries – are both high-impact, gas-weighted prospects located in close proximity to existing infrastructure. Longboat raised gross proceeds of £35 million in 2021 by means of a share placing and a NOK 600 million – £52 million – Exploration Finance Facility (EFF) with SpareBank 1 SR-Bank and ING Bank to finance the drilling programme.