Angus Energy announced this morning it would be producing oil from four wells in the Weald in southern England in the first three months of this year.
In a statement to investors, Angus said it would resume production from two currently suspended wells at Brockham in Surrey and Lidsey in West Sussex.
It would also begin production from a new sidetrack at Brockham, the subject of a long-running planning dispute, and its new sidetrack at Lidsey.
The Angus Energy share price rose today by 7.41% to 10.88p.
Angus said it planned to produce from the Great Oolite reservoir at its Lidsey site in February using the currently suspended Lidsey X1 well.
In March it would begin production from the Portland reservoir at Brockham, using the suspended well BRX2Y.
The total from both wells before suspension had been 50 barrels per day, the company said.
Angus said its previous guidance on production from the disputed BRX4Z sidetrack at Brockham remained unchanged.
This dates back to October 2017 when the company said in a statement that commercial production from the Kimmeridge layers at Brockham would begin in Q1 2018.
Angus had previously confirmed in a statement in March 2017 that there was potential for Kimmeridge oil production from the BRX4Z, which had been drilled in January that year.
Within days of the March 2017 statement, the company and the BRX4Z were embroiled in a planning dispute with Surrey County Council.
The council insisted that drilling and production from the BRX4Z would need a new planning application. Angus disagreed.
In October 2017, Angus Energy said the council had asked it to submit a planning application for operations associated with BRX4Z (statement to investors). Just before Christmas, the council confirmed that it had received a planning application from Angus (DrillOrDrop report). But at the time of writing, this has not been published.
An application for the sidetrack, either drilling or production from it, would be expected to go through a public consultation. This must be at least 14 days but is often at least 21 days.
To meet the timetable of production by the end of March, an application for production would need to be ready to go before Surrey county councillors at a planning committee meeting on either 21 February 2018 or 21 March 2018.
Before production could get underway, Angus would also need to install equipment to generate electricity from any gas associated with the oil at Brockham. This was a requirement of the Oil & Gas Authority when it approved the company production plans last year.
Angus said today the installation to the Nation Grid was in progress and “contracts have been executed with a scheduled completion in March 2018”.
The other new well mentioned in the statement, the X2 sidetrack at Lidsey, was drilled in September 2017.
Initial flow rates, announced in November 2017, were 40 barrels of oil per day, much lower than the 400 predicted by Angus managing director, Paul Vonk, during an interview in July that year.
The company said the well had experienced significant gas locks, causing the pump to fail. A different pump did not fail but the flow rate had declined significantly every six hours.
Angus said today it had completed its review of the initial flow rates. It added:
“The installation of a new pump to optimise pressure differentials and maximize production flow rates will be completed in February 2018.”
Improved market conditions
Referring to its drilling plans, Angus said:
These operations reflect improved market conditions and an increase in oil pricing, and will enhance the Company’s financial flexibility.
At present oil prices are on the rise. At time of writing, Brent Crude is at over $70 per barrel, its highest price for more than 3 years.
- DrillOrDrop asked Angus Energy about the Brockham planning application. This post will be updated with any response.
15/1/18 Report updated to include reference to current oil prices