Industry

Angus explains Lidsey oil disappointment and compares Kimmeridge to leading US oil field

Lidsey X2

Angus Energy has given more details about problems at its Lidsey oil site near Bognor Regis in West Sussex. It also likened one of Lidsey’s source rocks to the Bakken oil field in North Dakota.

Last week, the company announced initial flow rates of 40 barrels of oil per day (bopd) from the Great Oolite section of its new sidetrack well at Lidsey. This was significantly lower than the 400 predicted by managing director Paul Vonk during an interview in July and the Xodus forecast of 279 bopd in November 2016. DrillOrDrop report

In a statement to investors this morning, Angus said the well had experienced significant gas locks, causing the pump to fail. Gas locks, explained by Schlumberger, happen when compressible gas interferes with the proper operation of valves and other pump components, preventing the intake of fluid.

Angus said it had installed a different pump, which did not fail. But the company said:

“Every six hours the rate declined significantly with bubbly oil recovered to surface even though production is above bubble point.”

It added:

“Angus Energy has put in place a comprehensive diagnostic program with the help of external experts to make all necessary repairs and adjustments to further conventional oil production at Lidsey and increase yield from Lidsey-X2.”

“Good potential for Kimmeridge”

The statement and a presentation to investors also released results of tests on the Kimmeridge formation from the sidetrack, Lidsey-X2.

Angus said the total organic content (TOC) values, historical temperature (Tmax) and hydrogen index (HI) in the Kimmeridge were similar to those at the Brockham and the Horse Hill wells in Surrey and comparable with the Bakken Shale formation.

171120 Angus Energy Lidsey potential

Extract from Angus presentation to investors, 20 November 2017. Source: http://www.angusenergy.co.uk/wp-content/uploads/2017/11/Lidsey-Geochemical-Analysis-Update.pdf

According to the presentation:

“The geochemical properties of the Kimmeridge at Lidsey are similar to that at Brockham, and at Horse Hill (which has already flowed oil from the interval).

“Comparison with the analogous naturally fractured Bakken Shale play in the USA indicates a good potential for the Kimmeridge in the Weald Basin.”

Question of fracking?

Oil production in the Bakken became economic with the use of horizontal drilling and hydraulic fracturing. Production boomed after 2000 and by the end of 2010 rates had reached 458,000 bopd.

But Angus said in today’s statement:

“The Bakken formation is a hybrid reservoir like the Kimmeridge in that it has fractured limestones which enable natural production. It is therefore a close analogue to the Kimmeridge in both the generation of oil and how it can be produced.”

The statement did not refer to fracking but the presentation said:

“Although thinner at Lidsey, the naturally fractured micrite limestone beds seen at Brockham and Horse Hill are present, and offer the opportunity to develop the interval using conventional methods (no hydraulic fracturing required).”

Earlier this month, UK Oil and Gas announced that the first zone of the Kimmeridge to be tested at its Broadford Bridge well in West Sussex would not be commercially viable without reservoir stimulation.

Angus also said today there was confirmation that other source rocks at Lidsey, the Oxford and Lias, “compare favourably” for organic content and oil generation. It said it would now seek permission from the Oil and Gas Authority for permission to begin production appraisal of the Kimmeridge and Oxford layers at Lidsey.

Share values

171120 Angus Energy share price

Angus Energy share movements, 20 November 2017. Source: London South East.

Shares in Angus fell 41% (11p) on Friday after the statement about the flow rate from the Great Oolite. Today’s statement lifted the share price initially but it later fell back to close up just 2.4% at 16p.

 

 

23 replies »

  1. What? Not a hole in the production tubing then? Dear dear, how sad, never mind!

    I am almost beginning to feel sorry for Angus? But then i think of all those present and future lives that will be ruined by this incompetent industry, and i think, frack ’em!

    Its beginning to sound like the tory predictions for economic recovery? More to do with behind the doors party generated spin than actual real world holes in the ground?

    Don’t worry Angus, you only accidentally added one zero, perhaps that should have been on the credibility rating?

  2. So Bognor could be the new Bakken ? Similarities ? In May 2012, North Dakota passed Alaska to become the No. 2 oil-producing state in the country, which the Wall Street Journal attributed to the use of fracking. The F word which was being so avoided by O&G companies is starting to creep back into their vocabularies even if only to deny they will use it. How long before that changes I wonder? There is nothing new in this RNS from the Black Friday 13th RNS , just an attempt to fluff it up to cover the disaster they made .

  3. Isn’t it amazing how the comments on these sites from industry have gone quiet lately? All them months work trolling
    for INEOS must have paid them well

    • Don’t understand the INEOS comment as this is a traditional oil field.
      Anyway, as I posted earlier, the horizontal well appears to be placed in a part of the reservoir which they tested in the vertical well and got zero increment from. The various production figures they quote need to be taken with a large pinch of salt. Maybe they’ve ….drilled into the gas leg, …how much of the horizontal well is actually in the target zone, …put in the wrong size of pump…
      However, increasing your flow four fold going from vertical to horizontal is actually a very good inprovement (from 10 to 40 bopd)
      Personally, I’d sack the RE or get some new advisers.

  4. Really Joe? Welcome.

    You mean that anyone who finds your “views”-if you enlighten us-contrary to their own, has to be working for industry??

    Have you not sold enough wind turbines this month? Gas usage remaining stubbornly high? Maybe rehearse your sales pitch rather than place blame elsewhere.

  5. At 40 barrels a day x $50/bl that’s $2000/day or $140, 000 a week or $7,280, 000 a year. That’s is not bad for one single non performing well and considering s small capex company like this. What are they complaining about.

    • Above maths appears incorrect. Should be

      At 40 barrels a day x $50/bl that’s $2000/day or $14000 a week or $728,000 a year.

      Meaning £549,392

      Company house figures on Angus show

      Sale of oil in 2016 as £73,000

      5 employees in 2016

      2 Directors salaries for 2016 was £235,000

      Using the 40 barrel scenario of bubbly oil this leaves around £300,000 to pay the other 3, the set up cost, the running costs, and pay back the investor etc.

      Doesn’t look like a cash cow to me. Far from it.

  6. Ahh, TW, but of course it is more than $50/barrel, so not quite such crap. Should produce enough diesel to keep at least one anti motor chugging away.

    • Was about to say Martin. $728000 a year is not scrap at all. Having 10 wells on the same pad will add up quite a hard cash source for a small cap company.

    • If the oil matches the benchmark crude the producer will get around the spot price.

      This ‘bubbly’ oil doesn’t sound like benchmark crude but may well be suitable for old Morris Marinas which is the ideal car for those who are worried about the environmental issues surrounding importation.

      Norweign oil and gas and Chinese goods for instance.

  7. In my view the south-east is always going to be a side show to the main event which is hydraulic fracturing for natural gas in the Bowland shale in the North. I’m excluding ,of course, the Dorset field which is from a different structure.

    There have been small wells in the south-east for decades which have been quietly producing small amounts of oil and not bothering anyone. Igas or it’s predecessor companies I think managed to get about 1000bd in Hampshire for a while but that is largely run out. My guess, based on the BGS reports from a few years ago, is that conventional production will never be other than mediocre but when hydraulic fracturing is used here it will probably make a better but still small contribution to national supply.

    Personally I’d rather see a few “nodding donkeys” in the landscape rather than massive wind turbines. I presume all but the most extreme will admit we will need some crude oil in the future, if only to make plastics etc which depend on crude as a feedstock. Surely it’s better to produce it here in a environmentally controlled way rather than importing.

    • Shalewatcher.
      ‘if only to make plastics etc which depend on crude as a feedstock’
      Thankfully farmers are gradually moving away from oil based farming. Do you know that small scale ethical farmers/individuals produce more food per acre in the world than huge intensive oil based farms?

      And plastics themselves; there are clearly alternatives, yes we have used them before. There has to be a balance. We need to move away from supermarket ‘feeding stations’ with pre-packed food in three layers of packaging to ‘nudge’ us into buying. The food content in these products is minimal and the ‘packaging’ inflates the price and causes food poverty and unnecessary waste, some of which cannot be recycled. We need to get back to basics, whole food prepared at home.Less plastic means less oil, means less imports.

      ‘Personally I’d rather see a few “nodding donkeys” in the landscape rather than massive wind turbines.’ you don’t use an adjective to describe these ‘nodding donkeys’ yet the wind turbines are ‘massive’; interesting.And of course it’s not just about aesthetics, its about what comes up out of the ground and its impact of the planet.

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