Egdon to seal Biscathorpe oil well after it fails to find target formation

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Biscathorpe oil exploration site, Lincolnshire Wolds Area of Outstanding Natural Beauty, 6 January 2019. Photo: Eddie Thornton

Egdon Resources’ new well at Biscathorpe, near Louth in Lincolnshire, has failed to encounter the oil formation it was targeting, the company said this afternoon.

In a statement to investors, the company said the well would now be sealed and suspended, as a possible future site for a sidetrack.

Shares in Egdon closed the day down nearly 22% at 6.25p.

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Shares dropped sharply on news of the Biscathorpe well, 20 February 2019. Chart: London South East

Egdon said the primary objective of the well – the Basal Westphalian Sandstone – was poorly developed at the Biscathorpe-2 well site. The formation was not thickened, as had been predicted in the pre-drilling model.

The company said the results of logging the well, spudded earlier this year, showed there was evidence of proximity to an effective petroleum formation in the Dinantian Carbonate. But it said the formation had very low porosity and would not make an effective reservoir.

The statement said porous sandstone reservoir intervals had been encountered in the shallower Westphalian sequence but they were all interpreted as water wet.

The Westphalian Sandstone had potential to be more thickly developed to the north and north east of the Biscathorpe-2 location, the statement added.

Egdon said:

“The forward plan is to seal the open-hole section with cement and to suspend the well in order retain the option for a potential future side-track. This will be considered once the new well data is integrated into an updated subsurface model. Any further drilling operation would require additional consents including planning permission.”

The company’s managing director, Mark Abbott, said:

“Although the Biscathorpe-2 well did not encounter the thickened Basal Westphalian Sandstone as predicted, we are encouraged by the presence of shows in the underlying Dinantian Limestone which demonstrates a functioning petroleum system and we will now take some time to incorporate the results of the well into our prospect model before deciding on the future strategy for further evaluating the Biscathorpe Prospect.”

Egdon said the well had been drilled to a total depth of 2,133m. But logging had been delayed when wireline tools had been unable to get to the total depth because of hole conditions.

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Protest outside Biscathorpe oil site, 3 January 2019. Photo: Jane Rushby

The Biscathorpe wellsite had seen regular protests by opponents of the onshore oil and gas industry. It is in the Lincolnshire Wolds Area of Outstanding Natural Beauty and close to a protected chalk stream.

Egdon failed to drill the well during the first three years of its planning permission, granted in March 2015, citing low oil prices.

In May 2018, Lincolnshire County Council granted the company an extension of planning permission until December 2020. A request for a judicial review of this decision was refused by the courts.

One opponent of the operation, Elizabeth Williams, said in response to the news:

“My fear is that this will lead to a perceived entitlement to apply for well stimulation methods with alarming echoes of Wressle-1 and the planning history there”.

This is the second UK onshore well in two months that has failed to encounter its target formation. IGas’s Tinker Lane shale gas well in north Nottinghamshire, failed to find the Bowland Shale in December 2018.

Another Egdon site in Lincolnshire – Wressle, near Scunthorpe – is heading for its second public inquiry. In November 2018, North Lincolnshire councillors refused permission for long-term oil production for the third time. Egdon has appealed and the details are now on the Planning Inspectorate’s website. A date has not yet been set for the inquiry.

Egdon said it expected to issue an operational update in the coming week, ahead of its six-month interim results.

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