Angus Energy announced this morning that part of the target Kimmeridge oil interval at its well at Brockham in Surrey is producing water.
In a statement to shareholders, the company said it was putting together what it called a “further engineering program” to isolate the water zone. A workover rig is expected to return to the site, Angus said.
The company said “small quantities of oil” also returned to the surface and were confirmed as Kimmeridge oil. But it said:
“It has become apparent that a part of the perforated interval is producing water, which is inhibiting significant oil flow and therefore has not allowed for sustainable flow rates of oil to be reported at this time.”
The Angus share price fell on the news. At the time of writing, it was down 24% at 5.50p.
This is the second well tested by Angus in the Weald region to have been shown to produce water. A statement in October 2018 on the Balcombe site, now operated by Angus, said that the well test had encountered unexpected water. This was later explained as “unrecovered brine from previous activities at the site”.
This is also the company’s second test to have suffered from delays and equipment problems. Today’s statement said:
“During operations several key completion components failed for a variety of reasons beyond the Company’s control.
“This also led to delays over the December and early January periods.
“These long-lead items have not been re-installed but rather engineering work-arounds have been implemented, including a resort to lifting by injection of N2 [nitrogen].”
At Balcombe, the company reported that coiled tubing equipment failed after the second test, resulting in a delay. The company ran out of time allowed by its planning permission and no further tests were carried out.
Today’s statement said the tested interval at Brockham – from 960m-1155m – had been identified as the best for perforation, based on the Tmax measure. This is the temperature at which the maximum rate of hydrocarbon generation occurs in a kerogen sample.
The former chairman, Jonathan Tidswell-Pretorius, who remains operations director, tweeted this morning:
Today’s announcement is the first operational statement by Angus Energy’s interim managing director, George Lucan. He took over last week from Paul Vonk, who resigned after a board room power struggle at the company.
Lord Lucan said today:
“I am very pleased with the oil analysis clearly confirming Kimmeridge oil at Brockham. The water zone is obviously an unexpected hindrance but, with natural flow to surface and evidence of oil, we remain quietly optimistic of achieving commercial success at Brockham. Brockham in combination with Balcombe could be transformational for the Company and oil production in the Weald.”
Vonk said ” We only have to turn the taps on ” What are they going to do ? Run a bath ? Latest production figures show that Angus are getting nothing of value out of the ground with the death spiral loan conversion looming too. Even the proposed 24/7 production at Lidsey wont make it pay. One thing strikes me though , Angus knew this before Xmas yet failed to inform punters in the previous RNS , very bad PI relationship. Cant be trusted as ive said on so many occasions.
There was a guy who made wine out of water; perhaps he can help them get back their investors money?
Angus keep finding more water than oil, maybe Mother Nature is dropping hints that they are in the wrong business. Researching how to make wind/solar/tidal powered desalination plants might yield bigger dividends in the long run.
Oh silly me I forgot, neo-liberal planet-eaters only think in 18 months balance sheet returns, not the long run.
Hahaha. I thought they were drilling for oil. Not water. The UK onshore doesnt seem to get a good start this year. First earthquakes at PNR and a fake news gas flare video. Now they get water flow (at good flow rate) instead of oil. Lol.
Odd comment there Jono, that Angus “knew this before Christmas”.
Think if you look at the timeline, there was little underway before or over Christmas.
But, they seem quite good at finding water. Perhaps they should diversify. Could become a valuable commodity in this neck of the woods if the temperature rises, and the change in solar activity forecast to produce a mini ice age in a few years time, doesn’t materialize.
If you read the RNS it explains the problems were in December and January . The objective was to initiate instant flow by perforating with a maximum underbalance of pressure between the reservoir and the well. During operations several key completion components failed for a variety of reasons beyond the Company’s control. This also led to delays over the December and early January periods. These long-lead items have not been re-installed but rather engineering work-arounds have been implemented, including a resort to lifting by injection of N2.
Ermm. That quotation is NOT saying what you are saying Jono. Angus actually stopped for a considerable period over Christmas, much to the annoyance of some. So, it is obvious that it was not until well into January that anything substantial was determined.
Yes, a stuttering, watery start, but no indication of any sort of misleading the market. An RNS is not intended to notify every time someone clocks on, a piece of kit fails, but when there is something of significance to report.
Ah right , I see Martin , this breakdown / failure wasn’t going to make a difference to the SP ? While happy to let investors throw money at the last double figure drop in price ? They were all expecting the boardroom antics to be a chance to grab cheap shares .
Not if they managed to work around it, Jono.
But, of course you wish to make two stories out of one. Good job one of the guys on site didn’t go down with ‘flu, then we could have had a virus from the bowels of the earth interlude.
What price is cheap Jono? Looking at Angus share price history and the way it reacts to all sorts of influence, you may have the answer but I suspect not.
I hear they may be raffling a barrel of Kimmeridge Water to fund the work at Brockham 😀
Within a few generations we shall drill to get fresh water at good flow rate.
Maybe DoD have found now new area for its friends who enjoy jumping in front of the gates? Water companies! They do drill using the same methods as oil companies. What if something nasty will come out and pollute ground water? Common guys, get some nice banners, gather some people who have lots of free time and miss hippie times and do what u do best! Interrupt work of those who under British law! 🙂
Aw , have you lost money Tom ? Last time I looked protest is legal in the UK and is a huge part of our history . Without protest we would still have slavery and women couldn’t vote.
We had politicians who outlawed slavery and made it legal for women to vote, Jono.
Don’t think they have outlawed oil yet. Seemed to be quite a queue at the garage today.
Protest as much as you like if you have lost money on Tesla or bio energy and hope to change the playing field, but don’t try and avoid the consequences and imply they are undemocratic. Currently, democracy has decided that fossil fuel is authorised. All types of protest are not legal. A small point that is rather important.
Well Jono, Britan was over 100year behind Sweden in women voting rights. And politicians outlawed slavery only because they could convert people to monies. Did not change much in peoples racism, it was on TV in 1970 and did not disappear till this day from social life. In the history, arguably British created the most suffering around the globe, and inspired some (Germany, Japan, Russia) to rule other nations . And how high this nation still regards itself could be seen in brexit vote. Not understanding it but lingering for good old glory days when trillions were stolen from countries like India or Iran. Now you want again ,to have oil extracted on other people land, so you can happy live here in fake green land. Land where 99% animals perished, where most of forests, habitats were destroyed, what is left is fake ‘Natural Beauty’ landscape, only for good self esteem… This is as natural as plastic in keyboard we all using to write here. Human made. And tell me please? To have you keyboard? Do you really want to process to plastic used in your keyboard,oil transported from other half of the globe? From other poorer people backyard? Well, this attitude is similar to what British government was doing trough centuries. Not in my back yard. Using others misfortune for own benefit. Oil will go when economy will be ready for this, and I want the same, but for now we are dependent on it and it is childish not to understand that. Democracy wants oil for now, as there is no other option to sustain human species on this level – level when we can communicate via plastic keyboard.
Just perhaps this water has come from the aquifers, via poorly drilled and sealed well bores. But of course Angus would never tell us if this were the case, for that would probably wipe their shares out.
Maybe you could enlighten everyone which aquifer you suspect was the source of the water. Your expertise could be well used in the environmental agency who despite being very well qualified can’t seem to understand the subsurface in the same depth as you
Or, just perhaps it didn’t Malcolm, and the Angus would not need to tell you!