UK oil & gas firm hits pause on farm-out for asset off Ireland to spruce up subsurface imaging
UK-headquartered and AIM-listed oil and gas player Europa Oil & Gas has decided to temporarily halt the farm-out process for a license located offshore Ireland until the subsurface imaging of the identified prospects is boosted further by reprocessing the data at 30Hz.
Europa Oil & Gas confirmed in November 2022 that it was working on finding a farm-in partner for its FEL 4/19 license offshore Ireland, which holds the Inishkea prospect adjacent to existing infrastructure at the producing Corrib gas field. Irish authorities granted consent to extend the first phase of the license until January 31, 2024, to allow the company more time to secure a partner in a bid to advance the development of the license.
Following the interpretation of recent seismic reprocessing, the UK player’s Pmean prospective resource estimate for Inishkea West has increased by 92% to 1.55 tcf. The seismic data has been reprocessed using full waveform inversion and reverse time migration (RTM) to 20Hz, resulting in a marked improvement in the imaging of both the Inishkea West and Inishkea prospects, with the Inishkea West structure now being mapped as a large four-way closure, with a prospective resource Pmean of 1,554 bcf.
Furthermore, Europa explains that the reprocessed seismic has materially improved the subsurface imaging and provided more confidence in the quality of the seal and trap at Inishkea West, which in turn has increased the chance of success of the prospect. As Inishkea West is perceived as a shallower structure by some 900 meters, the firm interprets this to mean that the reservoir quality will be better than at Inishkea.
On the other hand, the reprocessing for the Inishkea prospect, which relied on a degree of side seal for historic estimated volumes, has confirmed the likelihood of side seal breach and therefore resulted in the downgrading of the prospect. In turn, the Inishkea structure has reduced in size and is now estimated to have a prospective resource of Pmean 146 bcf.
Will Holland, Chief Executive Officer of Europa, commented: “This is a very exciting development for the FEL 4/19 license as the seismic reprocessing has significantly enhanced the subsurface imaging which has improved our understanding of the size of the prospects and the seal risk. These results have more than justified the additional time and expenditure on what is a key asset for not only Europa, but also Ireland in terms of potential indigenous energy security and as part of the country’s energy transition.”
Moreover, Europe highlights that the Inishkea West is within easy tie-back range of the Corrib gas field situated some 18 kilometers to the southeast, thus, this proximity to the Corrib infrastructure, the mapped four-way closure, the large prospective resource, and the reduced seal risk means that the Inishkea West prospect has become the primary target on the FEL 4/19 license.
Therefore, it is expected that the subsurface imaging can be further improved by reprocessing the data at 30Hz given the significant improvement seen in the 20Hz RTM data. In line with this, the UK player has decided to apply for an extension to the first phase of its FEL 4/19 license to allow time for the 30Hz reprocessing to be completed and to subsequently find a suitable partner to drill an exploration well.
Bearing this in mind, the farm-out process that is being managed by Llamas and Bannister Energy Advisors, as announced on 11 January 2023, has been paused until the 30Hz reprocessing has been completed.
“The seal uncertainty, which the reprocessing has addressed, was a matter that some of the potential farm-inees had highlighted during the farm-out process and potential partners wanted to see the results of the reprocessing before making an offer. However, we now believe that the subsurface imaging can be further improved by reprocessing at 30Hz and we will therefore be applying for a phase one license extension to allow us to complete this work before continuing the farm-out process,” added Holland.
This development comes months after Europa Oil & Gas decided to relinquish a license located offshore Morocco in March 2023, as its farm-out process did not yield results due to low interest in deepwater oil exploration.