Ithaca takes interest in two UK North Sea discoveries
Ithaca Energy has expanded its position in the Greater Stella Area (GSA) with four agreements entered into for the acquisition of additional interests in the Vorlich discovery and an operated interest in the Austen discovery, in the UK North Sea.
Les Thomas, Chief Executive Officer, commented: “This is in line with our “hub and spoke” strategy for maximising the value of the central infrastructure that has been put in place for the start-up of production from the Stella field.”
Ithaca said on Tuesday that sale and purchase agreements (SPAs) have been executed with ENGIE E&P, INEOS and Maersk to acquire a 100% interest and operatorship of Licence P1588 (Block 30/1f), effective January 1 ,2016.
Licence P1588 contains approximately 10-20% of the Vorlich discovery, with the balance of the discovery being located in licence P363 (Block 30/1c). When taking into account the P363 licence interest acquired from Total in January 2016, execution of the SPAs increases Ithaca’s overall interest in the Vorlich discovery to approximately 33%.
Vorlich was discovered and appraised in 2014 with exploration well 30/1f-13A,Z and 13Z. The well encountered hydrocarbons in a Palaeocene sandstone reservoir in Block 30/1c and a subsequent side-track into Block 30/1f confirmed the westerly extension of the discovery. The well was flow tested at a maximum rate of 5,350 boepd (approximately 80% oil).
Vorlich is located approximately 10 kilometres north of the company’s GSA production hub and is estimated to contain gross proven and probable undeveloped reserves of approximately 24 MMboe. Ithaca said that following completion of the Vorlich appraisal program in 2014, current activities are focused on planning and preparation of an FDP.
Upon completion of the acquisitions, the overall Vorlich licence interests will be:
– Licence P363: BP (Operator), 80%; Ithaca, 20%;
– Licence P1588: Ithaca (Operator), 100%.
Ithaca also said that an SPA has been executed with ENGIE E&P to acquire a 75% interest and operatorship of Licence P1823 (Block 30/13b), effective May 1, 2016. The licence contains the Austen discovery, which is located approximately 30 kilometres south-east of the GSA hub.
Austen is an Upper Jurassic oil / gas-condensate accumulation on which a number of wells have been drilled, the most recent being appraisal well 30/1b-10,10Z drilled by ENGIE E&P in 2012 that was flow tested at a maximum rate of 7,820 boepd (approximately 50% oil).
The gross contingent resources (“1C” to “3C”) associated with Austen are estimated by Ithaca to be in the range of 4-28 MMboe2. An independent assessment will be completed at the end of the year as part of the usual annual reserves evaluation exercise, the company said.
Upon completion of the acquisition, Ithaca will be the operator of the Austen licence with 75% interest, and Premier Oil will have 25% interest.
Ithaca stated that it is planned for further subsurface and development engineering studies to be completed in order to advance preparation of an FDP for approval prior to January 2019.
The licence acquisitions are expected to complete in the second half of 2016 and are subject to normal regulatory and partner approvals, including approval for the transfer of operatorship.
The company noted that the previously announced acquisition of the Vorlich working interest from Total was completed in July 2016.