Industry

Angus looks to sell Brockham after sidetrack found “uncommercial” without fracking

Brockham lorry1 Brockham Protection Camp

Delivery to the Angus Energy site at Brockham. Photo: Brockham Protection Camp

Angus Energy has said it is in talks to sell its stake in an oil production licence in Surrey after revealing that a controversial sidetrack well was unlikely to flow commercially without extra stimulation.

Shares in Angus fell 64% during the day to an all-time low of 1.25p. At the time of writing (3.30pm), they were 1.35p, down 62%.

The well, BRX4z, was drilled at the Brockham oil site near Dorking in January 2017 into the Kimmeridge layer of interbedded shales and limestones.

Surrey County Council had repeatedly said there was no planning permission to drill the sidetrack. Angus disagreed but in 2018 it applied and was granted retrospective consent.

In February 2019, Angus reported water in the sidetrack and said a well test did not achieve sustainable flows.

A statement to investors this morning follows work carried out in April 2019 to isolate the water. On the results of this work, Angus said:

“it is the view of the Company that, on any conventional approach, it is extremely unlikely that commercial hydrocarbon flow can be established from the Kimmeridge layer at Brockham.

“Supplementary stimulation techniques including hydraulic fracturing have been ruled out by the present Operator. The Company, in its role as Operator, has already made clear that it is not a proponent of the use of such unconventional production techniques in the Weald and this position remains unchanged.”

Angus added:

“the Company announces that it has entered into preliminary discussions with a third party regarding a sale of the Company’s own 65% interest in the Licence.”

The negotiations were at what Angus described as “a very early stage” and there was “no certainty” about the outcome or any terms.

The company has 65% of the licence, PL235. The rest is held by Alba Mineral Resources (5%), Brockham Capital Limited (10%), Doriemus (10%) and Terrain Energy (10%).

Angus said it would consider whether any impairment would be required in the carrying cost of the Brockham licence. This has been said to represent 26% of the company’s gross asset value.

Five days ago, on 24 June 2019, Angus was talking about preparations for a well test at Brockham. In interim accounts it reported that the Brockham work had been “successfully completed” adding:

“Further work, preparatory to a well test, is underway as we go to print.”

But today, Angus managing director, George Lucan, described the result of the work on BRX4z as “clearly disappointing”.

“Great news”

Angus Energy’s operations in Surrey have been monitored by the campaign group, Brockham Oil Watch (BOW). A spokesperson said today:

“This is great news. We are grateful to all those who have been keeping a watchful eye on the actions of Angus Energy at Brockham, and helping to maintain pressure on the regulators to make sure the site is monitored closely.

“Angus confirmed today what Professor David Smythe, BOW and others have been saying all along – that it will not be possible to commercially produce from the Kimmeridge without hydraulic fracturing or acid stimulation.

“We must remain vigilant. There is still a danger that Angus will sell its share of the license and the operatorship to a company that will use these methods. If that is the case, the new company will face an even stronger opposition from the public.”

One of the companies that has a stake in licence, Alba, said its technical team would be assessing the Brockham results. The company said:

“While this news from Angus is, on the face of it, disappointing, it is important that we put it in its proper context for Alba shareholders.  Our 5% stake in the Brockham licence is only a very small part of Alba’s asset and investment portfolio.  Indeed, our interest in Brockham is shown in our last published accounts (to 30 November 2018), at a value of £346,904, which represents just 4.1% of our net assets of £8,466,188.”

“While the oil at Brockham appears to be reluctant to flow, meanwhile at Horse Hill, which is just a few miles down the road and in which oil field Alba has a much greater stake, the oil continues to flow steadily, and has done so ever since the flow-testing programme commenced some 12 months ago.  That is testament, as ever, to the risk-reward nature of the exploration business, but also testament, in my view, to Alba’s strategy of accumulating a diversified portfolio of assets and investments such that we are far from reliant upon the success of one single project.”

Balcombe

Angus also announced today that a planning application for a long-term well test at its Balcombe oil well was expected to be submitted to West Sussex County Council by August.

The company confirmed that the second term of the Balcombe licence, PEDL244, had been extended from 30 June to 1 July 2020.

 

22 replies »

  1. All that “watching” and there was no oil!

    The futility of gestures in the face of science.

    Not just Angus with an eggy face.

    (Maybe Brockham was the Trojan Horse?)

  2. Strange how Doriemus got out of the Weald just prior to this, anyone might think they knew something before the mug punters, nice to see that my prediction has happened, looks like the Kimmeridge isn’t as naturally Fractured as Angus and Lenigas said. Mind you, the BOD got their wages over the last few years for doing nothing. Im now going to make another prediction that UKOG wont get commercial flows from the proposed new wells into the Kimmeridge because they will have the same issue as at Brockham. The only reason they are getting oil now is because they have drilled a fault line and that will decline very quickly. Weald oil is over and anyone who still has cash invested should pull out now. The knock on effect on UKOGs SP has already started. Ive waited a long time for this day but its been worth it.

    • Jono – you need to brush up on your knowledge of geoscience before discussion this subject because your rankings are simply wrong. I’ve worked on loads of fractured reservoirs and their one characteristic is that production rates vary widely because of the extreme difficultly of not only predicting where the fractures are located but also which ones will flow. As an example, I worked on a very profitable field in the Middle East into which over 50 wells were drilled. Many contained open fractures but others didn’t. The odd think was that 80% of the production can from one well. When that was examined in detail it was shown that nearly all production came from a 1 m interval. Essentially, your that the only reason UKOG obtained flow was due to intersecting a fault has no evidence to support it. It seems you’ve been listening a bit too much to Smythe. Take it from me, I don’t know a single respected petroleum geologist or engineer who takes anything that he says seriously.

  3. Martin, all that watching and there is oil, they just can’t get it without fracking, please try to keep up. After all, you have been very keen to comment previously about the natural fractures and how there was no need to frack. Swampy is always right because we do some research and we are not in it for greed. Have a nice weekend and dont forget to cancel the £1 party 🎉

    • But, don’t bother to mention my comments were regarding somewhere else altogether Jono-do keep up.

      No, Swampy is not always right. Tried the Newbury bypass yet? Any fracking been done at HH?

      Typical Greens. Focus on the wrong things and claim they know best until it is obvious they have been wasting peoples time.

  4. I wouldn’t predict based upon false data, Jono. How do you come to decline very quickly? It hasn’t.

    The Prof. made similar “predictions” which damaged his credibility. Building on sand has the same consequences whoever suggests it.

    • Because Steve Sanderson said so in a video presentation, 60-70% over 12-18months, thats why they need back to back wells but then, what would he know? Im just happy to see that the illegally drilled sidetrack from the wrong well number hasn’t been commercial.

  5. Martin, i take no notice of your ramblings, Horse Hill hasnt announced any stable flow rates from the Kimmeridge yet they have for the Portland, why? Because its not going to flow without stimulating and then Sanderson will be proved to be a liar just like Lenigas, it’s all over and there’s a lady booked to sing very soon. The real money wont touch UKOG because it knows much more than you.

    • Can’t you read the figures given by Ruth, Jono?

      Oops.

      I would suggest you take notice of data rather than worry about “ramblings”.

      If you consider the next stage of development planned at HH, nicely summarised by Ruth, it might help you to focus upon why the Portland has been the recent target for testing. Do you know what? If I was to look to commercialise the Portland next then I would concentrate upon the Portland before doing so, especially as the coming work on the Portland can then be extended easily to get further info. regarding the Kimmeridge. Pretty Gold Standard.

  6. It’s been a long hard fight over the last 5 years or so, its great to see it finally paying off. These companies are folding, the smart money has already done a runner, investors atlre doomed.
    Well done to all involved, and thank you Ruth for keeping us informed.

    • Paul – the actions of the companies are dictated by the geology – the protestors are 100% insignificant

      • ‘the protestors are 100% insignificant’

        According to that logic Cuadrilla got their Becconsall geology results at dinner time on 22/09/2014 and it was just a coincidence that REAF and FOE were in a meeting with LCC and Cuadrilla in the morning.

        To expand,

        On 22/09/2014 Cuadrilla wrote to LCC planning department. The letter read “We write to confirm withdrawal of planning application 08/12/1032 for exploration development at Becconsall, with immediate effect”

        The decision was made immediately after a private meeting at LCC where members of Ribble Estuary Against Fracking supplied evidence proving the functional links between the Becconsall fracking site and the protected River Ribble Ramsar site. The main links were shown to be the connectivity of surrounding waterways and land usage of protected wintering wildfowl.

        UK shale gas. Pummeled by well organised communities.

        Take note Aurora. It could safe you a lot of time and investors money.

        • John – you are delusional. I know the people in Cuadrilla involved in that decision and I can assure you that you’re take on things is completely wrong.

      • “The protestors are 100% insignificant.” That doesn’t appear to be the sentiment of the fracking companies when they go crying to the courts to slap injunctions on those protestors’ actions. From where I was sitting, this week, in the Court in Manchester, Cuadrilla and their expensive lawyers were pretty steamed up about those protestors. Why bother? We’re 100% insignificant.

        • Pauline, I’m discussing the article (i.e. why Angus is selling Brockham) and this is about geology. The protesters do indeed cost the companies and tax payers as well as causing massive disruption to locals. Fortunately, I’ve not seen a single example of where exploration has been altered due to the actions of the ill-educated rabble.

  7. Have BOW, Lisa C??

    I shall watch with interest to see if others are more successful with the Weald. There does seem to be signs that could be worth watching. Whether that would be due to competence or location, time will tell.

    Meanwhile, I will get my sleep at night. Strange hours some of the antis keep.

  8. I cannot see how this can be seen as anything but a failure. No product and leaving under a cloud having drilled a side track without consent and crossed swords with the local planning authority. This has provided an already concerned public with yet another example of how these companies fail to comply. From the failure at Preese Hall, the problems at West Newton with the well and HSE, venting at PNR, planning breaches, I could go on. And each time people are quick to state they are minor issues, not a problem etc etc but that does not reassure. It certainly doesn’t look gold standard. Or do these many breaches not count? And worse still, some of these breaches have not been brought to the attention of the regulators by industry, they have been exposed by members of the public, part of the so called ill educated rabble.

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