UK: Statoil faces disappointment at Verbier
Norwegian oil company Statoil is unlikely to drill a sidetrack well on the Verbier prospect in the UK North Sea after encountering a water bearing reservoir at its exploration well.
Jersey Oil & Gas (JOG), a partner in the well, said on Monday that the exploration well 20/05b-13 drilled on the P.2170 licence Blocks, 20/05b & 21/1d had reached the planned target total depth of 4,267 meters on September 10, 2017. The well encountered water bearing upper Jurassic sands, deeper than anticipated.
Jersey Oil & Gas owns an 18 percent interest with the other partner in the well, CIECO, holding 12 percent. The operator Statoil has a 70 percent interest in the license.
JOG added that the decision on whether to drill a sidetrack would be taken after evaluation of wireline logs, although at this stage JOG considers this to be unlikely. In the event a sidetrack is not drilled, the well will be plugged and abandoned.
The well was drilled with ultimately no cost exposure to JOG. The company estimated that the cash position at September 30, taking into account both existing cash reserves and funds due from the company’s carry arrangements in respect of the Verbier well, would be approximately £2.5 million ($3.3M).
The well was drilled with the semi-submersible rig Transocean Spitsbergen hired by Statoil for three exploration wells in the UK and a six-well production drilling campaign on the Aasta Hansteen license off Norway.
Verbier was the third and last well in Statoil’s UK exploration drilling campaign, which started in July.
Andrew Benitz, CEO of Jersey Oil & Gas, said in Monday’s statement: “We are naturally disappointed by these results, but remain in a strong position to continue to pursue our core strategy of growth through potential production asset acquisitions.
“In light of the Verbier result, the company will now update its evaluation of the P.2170 license acreage and consider the possible implications for the Cortina prospect, which remains an independent and prospective upper Jurassic target.”
In related news, Azinor Catalyst, the Seacrest Capital Group-backed E&P company, said last week that the Partridge well, in which JOG had a contingent financial interest, was drilled to its target depth of 2,443 meters TVDSS. While it encountered excellent quality reservoir rocks, hydrocarbons were not present, and the well has now been plugged and abandoned. Accordingly, no contingent payments will be received by the company from Azinor.