IOG: Harvey gas discovery sub-commercial, but there might be a silver lining
UK-focused oil and gas company Independent Oil and Gas (IOG) has said that its September gas discovery made at the Harvey location in the North Sea appears to be sub-commercial, but a further mapping indicated the presence of a larger – potentially commercial – structure at Harvey up-dip to the northeast of the previous 48/23-2 well.
As previously reported, IOG in September completed drilling of the Harvey appraisal well 48/24b-6 in the UK Southern North Sea Gas Basin, confirming a gas discovery. It then said that it would start the analysis required to reach a definitive view on resource range, reservoir quality, and deliverability.
Initial analysis of the wireline data demonstrated the presence of a 49ft gas column at the top of the reservoir, in contrast to pre-drill estimates of a 211 ft gas column.
In an update on Wednesday, IOG said that the 49ft gas column at the 48/24b-6 well location struck in September appeared to be a sub-commercial discovery.
“The company experienced a technical issue in integrating the VSP data into the existing seismic dataset which hindered the initial analysis of the comprehensive dataset acquired from the well. However, this has now been resolved, enabling seismic remapping and an initial technical assessment of gas volumes to be completed. This remapping indicates that the Harvey structure as described on the pre-stack depth migration (PSDM) map prior to the well is likely to be compartmentalized into more than one structure,” IOG said.
On this basis, IOG said, the results of the 48/24b-6 well are mixed.
IOG said: “The 49ft gas column encountered at the well location appears to be a small independent pocket of gas of limited areal extent, resulting in what the Company believes to be sub-commercial volumes. However, the updated mapping based on the well data also indicates the presence of a larger structure at Harvey up-dip to the northeast of the previous 48/23-2 well, i.e. the northern part of the pre-well PSDM Harvey structure. The size of this structure implies mid-case recoverable volumes of approximately 40 Bcfe, analogous to Blythe.“
“Additional short-term technical work can provide further definition on the updated mapping and the company will proceed with this as the next step.”
Redwell discovery larger
Furthermore, IOG said its nearby Redwell discovery appears to be larger, with mid-case recoverable volumes of approximately 100 Bcfe. The Redwell discovery (previously Wherry) is in IOG’s P2441 license, to the immediate east of the P2085 Harvey license.
IOG said there were indications that Redwell extended further to the northwest than previously estimated, incorporating both the Redwell discovery and Woodforde prospect into a single structure with management estimated mid-case recoverable resource volumes in the region of 100 Bcfe.
“The wells drilled at Redwell by previous operators prior to 2006 demonstrated a low-relief discovery of good reservoir quality. Further reservoir modeling work will now be undertaken to confirm estimates of gas in place (GIIP), potential resources and deliverability at Redwell. This will then inform whether there is scope for future development in the Redwell-Harvey area (P2085 and P2441 licenses), potentially benefitting from direct tie-in to the by-then operating Thames Pipeline export route or tie-back to Core Project infrastructure such as the Southwark or Blythe platforms,” IOG said.
“Both estimates require further analysis and modeling work to inform the potential for a Redwell-Harvey area development off the back of the Core Project,” IOG said.
Andrew Hockey, CEO of IOG, said: “The Harvey well has provided us with an invaluable data set and enhanced geological knowledge of the area which may unlock a new development opportunity for IOG, and has reinforced the benefit of a highly focused regional presence. To achieve a robust initial interpretation of the Harvey well results, it was critical to ensure the integrity of the well data analysis and we have now done that. This gives us an updated subsurface view which can be further clarified by additional technical work.
“Although the gas accumulation at the 48/24b-6 well location is sub-commercial, our updated post-well mapping indicates that the northern section of the pre-well Harvey structure is likely to contain commercial volumes of gas and that Redwell has fairly substantial gas in place. We now intend to undertake the further modelling necessary to evaluate the potential for a commercial development in these licenses which would leverage their proximity to our fully-funded Core Project infrastructure. Meanwhile, progress on the development of Core Project Phase 1 continues on track following FID in late October.”
IOG shares fell to 13,04 pence on Wednesday morning, before regaining some ground and reaching 14,28 GBX at the time of writing of this article. IOG shares had closed at 16.38 pence on Tuesday.
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