The oil and gas company, Angus Energy, made no money from production in the year 2016-2017, according to its accounts published today. But its message to investors was that 2018 would be different.
The company lost £2.612m, compared with a small profit (£119.000) in the previous year. There was no revenue from oil and gas sales because all the wells were all suspended for modernisation. In 2015-2016, revenue was £73,000.
Angus said its focus for the next 12 months would be to “maximise production from all the assets in its portfolio”.
Chairman Jonathan Tidswell Pretorius said work was underway to produce from the Portland reservoir at the company’s site at Brockham, in Surrey, and the Great Oolite formation at Lidsey, in West Sussex. These activities would, he said, be complemented by “the first commercial production from the Kimmeridge layers at Brockham in 2018”.
This upbeat message, aimed at shareholders, contrasted with a more cautious approach in the planning application for the Brockham site, published online yesterday.
In January 2017, Angus drilled a sidetrack well at Brockham, called BRX4Z, into the Kimmeridge clay formation. At the time, the company told residents it was carrying out a workover of the parent well BRX4. Since then it has been involved in a dispute over planning permission with Surrey County Council.
The annual report repeated the company’s opinion, backed up by a QC, that it already had permission to drill BRX4Z and produce from it.
But the planning application said it sought retrospective permission for drilling BRX4Z and retaining the parent borehole, BRX4, for which consent expired in 2008.
The company is also seeking planning permission for what it calls “appraisal of BRX4Z using production plant and equipment”.
The application stated that the appraisal was to confirm “whether the volume and flow of hydrocarbons was economically-viable to support longer-term commercial production”.
It also said Surrey County Council had confirmed that any future production of hydrocarbons from BRX4Z would require planning permission.
“Should the appraisal reveal that there are hydrocarbon reserves that could viably be extracted in the future, an appropriate planning application will be submitted to allow longer-term production activities.”
The application’s Planning Statement suggested this could be two-and-half years away.
Although one section described appraisal as an “open-ended process”, another said the company planned to monitor the hole and surface pressures in BRX4Z during oil flows for 18 months. This would be followed by 12 months of data-gathering and detailed study.
After that, the planning application said:
“It is envisaged that the operator will have sufficient information to issue a report to the OGA [Oil and Gas Authority] detailing the results of the appraisal, including an estimate of resource present.
“Further appraisal will be dependent upon the result of these initial works and, if required, further data gathering will be undertaken.”
The planning application has no details of the size of any rig that would be used to prepare the well for appraisal, nor whether acids would be used to clean the wellbore or stimulate the formation. There are also no indications of volumes of oil or flow rates.
On traffic movements, the application said:
“It is anticipated that HGV movements associated with these operations will not be significant.”
Gas produced along with the expected oil will be sent to a generator to produce electricity for the site and for the grid, the application said. An emergency flare would be installed but the design and location have not been finalised. According to the application, the overall height of the flare is likely to be 12.2m. The planning statement said:
“It will not be prominent and given the site’s relatively remote location, will not result in any significant landscape or visual impact.”
Workovers on the site may happen during the period for which permission is sought, the application said. But it added:
“It is impossible to predict when, or even if, this would take place”.
The application does say a new gas-powered generator would probably hired. Produced fluids would be stored temporarily in tanks, oil would be transported off site by tanker and produced water reinjected into another well on the site.
Working hours for the site would be 7am-7pm Monday to Friday and 8am-1pm on Saturday. There were likely to be two staff on site during the working day.
The local campaign group, Brockham Oil Watch, said:
“Angus Energy have finally submitted this long-awaited application, which the council officers have been asking for ever since they found out that Angus drilled sidetrack BRX4Z without planning permission and despite their explicit advice.
“Not surprisingly, Angus appear again to be muddying the waters. They have been telling investors via official London Stock Exchange channels that BR-X4Z will be a production well as soon as it is regularised. However, this application is clearly for appraisal and not production. This is yet another example of how Angus communicate different messages to various stakeholders.
“Prior to December of 2016 all of the regulators (OGA, EA and HSE) were notified by Angus that drilling would be taking place, and issued consents. But the council was presented with a different scenario about “maintenance” activities.”
- The consultation opened on 20 March 2018 and runs until 18 April 2018. The target date for a decision by Surrey County Council’s planning committee is 23 May 2018.
- Link to the application SCC ref 2017/0215
Updated 10/3/2018 with comment from Brockham Oil Watch and on 21/3/2018 with consultation dates