Well test results at North Sea gas project ‘unexpected and disappointing’

UK-headquartered IOG plc may need to go back to the drawing board to formulate a new plan for the production from the Southwark field in the UK North Sea, as the current well-testing and clean-up process has failed to meet expectations.

This development is part of the IOG-operated Saturn Banks Project – Phase 1 – sanctioned in October 2019 – covering Blythe, Elgood, and Southwark fields in the UK Southern North Sea. The first two fields – Blythe and Elgood – were brought on stream in mid-March 2022. IOG holds a 50 per cent stake in this project and its partner CalEnergy Resources holds the remaining 50 per cent.

Previously, IOG experienced several setbacks with its Southwark drilling campaign, which delayed its progress. These setbacks resulted in a two-month hiatus caused by an issue on one of the legs of the Noble Hans Deul (now Shelf Perseverance) jack-up rig. In addition, subsequent technical issues with an underwater Remotely Operated Vehicle (ROV) further prolonged the company’s timeline.

Back in January 2022, the challenges associated with seabed conditions threatened to compromise rig stability, thus, causing yet another delay for IOG. However, with hydraulic stimulation underway at the A2 well, the company disclosed in November 2022 that it was focused on bringing Southwark on stream in “a safe and timely manner.” 

At that time, the first gas from the A2 well was on track to be delivered by year-end, subject to stimulation progress and operational risks to final hook-up and commissioning. On the other hand, the A1 well was planned to be completed after the first gas from A2 was achieved.

The company followed up on this in December 2022 to reveal that all subsea work had been completed for the Southwark A2 well, and well test and clean-up were planned for that week, with final hook-up and commissioning and safety reviews then leading to first gas by mid-January 2023.

Based on the firm’s information, Shelf Drilling’s Shelf Perseverance rig was expected to re-enter the A1 well, complete and stimulate it in the first quarter, so that it can come on stream by the early second quarter of 2023.

In an update on Wednesday, IOG reported that the Southwark A2 well had progressed through the hydraulic stimulation phase and was at the time in the clean-up phase, which was taking “longer than planned.”

With a maximum stabilised rate of 4.2 mmscf/d via coiled tubing, at a flowing wellhead pressure of 456 psi, gas rates observed from A2 – following stimulation of six reservoir zones – have been lower than expected, says the firm.

Furthermore, associated water rates of up to 1,632 bbl/d strongly indicate a connection to the active aquifer from at least one of the stimulated zones, adds the company while highlighting that the production logging tool (PLT) is being run to acquire downhole data that will help to understand the contribution of each zone and inform next steps.

Dougie Scott, COO of IOG, commented: “Having stimulated six discrete reservoir zones, a low gas rate and apparent formation water production at this stage of the A2 well clean-up is unexpected and disappointing. The production logging tool should provide important gas and liquid flow data to help us calibrate the forward plan, which is likely to be to isolate water-producing zones in order to assist gas flow.”

According to IOG, the potential solution – subject to the PLT data – would be to isolate water-producing zones to enable gas flow from other zones. To this end, the relevant equipment has already been mobilised to the rig and is expected to be utilised over the next week.

If isolation is successful, updated well test results will be expected within the coming weeks, providing “a clearer assessment” of the scope for the A2 well to produce gas at commercial rates, concludes IOG.

Rupert Newall, CEO of IOG, remarked: “The Southwark A2 well testing and clean-up process has not met our expectations to date. At this stage, however, the IOG and Petrofac teams continue to work through the options, gather data, interpret the implications for field production and evaluate next steps.”