Delivery to the Angus Energy site at Brockham. Photo: Brockham Protection Camp
The Kimmeridge formation at Brockham in Surrey is unlikely to generate significant volumes of oil because it isn’t mature, investors were told this evening.
Angus Energy executives were explaining why they had announced last month that the Kimmeridge well at Brockham was not commercially viable without fracking.
During a conference call, the company’s geo-scientist Freddie Holt described the Kimmeridge as a “novel play” for exploration companies who were “learning all the time”.
He said the Kimmeridge was very variable in organic content over very short distances. This led to variations in the maturity of the formation and the amount of recoverable oil.
Mr Holt said Angus had been focusing on the differences between Brockham and the neighbouring UKOG site at Horse Hill, trying to understand how the maturity might vary across the basin.
When did Angus know?
During the call, investors pressed the company on exactly when it knew that the BrX4z well at Brockham would not flow Kimmeridge oil at commercial rates.
Angus Energy site at Brockham, Surrey, on 16 December 2018. Photo: Brockham Protectors
Angus began a well test programme at Brockham in December 2018. The company had problems with water in the well, and the flow test did not achieve sustainable flows of oil.
In May 2019, the company announced that the zone producing the water had been isolated from the well and on 24 June, in its half-yearly report, the company said:
“Further work, preparatory to a well test, is underway”.
But just four days later, on 28 June, the company announced:
“On any conventional approach, it is extremely unlikely that commercial hydrocarbon flow can be established from the Kimmeridge layer at Brockham”.
The company’s technical director, Andrew Hollis, said Angus initially believed that the water coming into the well was stopping any oil flow because the water was at a higher pressure.
There were many factors which had to be considered, he said, before any conclusion could be reached.
The managing director, George Lucan said that the final preparatory work for the flow test had been completed on 24 June, the day the half-yearly report was published.
On 25 and 26 June, completion fluids from the well were examined by the technical team. It concluded that the well would not flow commercial quantities of oil.
The company’s board considered the findings on 27 June and it unanimously decided to make an announcement the following morning.
Shares in Angus Energy dropped 60% on the news.
Other news from conference call
- Planning blunder forced company to reapply for Balcombe consent
- “Restrictions on water reinjection limiting UK onshore oil and gas”
- Angus aims to accelerate production at Saltfleetby before gas is phased out
Categories: Industry
DRILL OR DROP? 
Shareholders burnt, a common occurrence when entering the casino.
Pye Pye
You can enter a casino and just drink coffee.
If you bet, you can rest assured that the odds ( the house advantage ) are well understood.
Investing in small cap companies is a bit different.
https://www.thisismoney.co.uk/money/diyinvesting/article-2883360/How-big-winners-penny-shares-avoid-companies-blow-up.html
However, on the theme of losing money while hoping to be rich
lottery punters burned when entering the paper shop?
Or, you could chuck your money into Thomas Cook!
Size and history is no guarantee. But, if you want security and a high dividend-there is always Shell. (Well, maybe not always, so DYOR.)
Martin
Indeed. Plus, which companies will benefit from any UK led ‘green austerity’ is no doubt being looked at by a few investors. Meanwhile one can always buy German bonds with a zero or negative interest rate, which does not seem to cover the risk that it is German debt, but nominated in Euros.
So I guess this is proof that the Weald is not a continuous pool of oil in the Kimmeridge then . I expect Sanderson (UKOG) isn’t best pleased about this announcement and that the natural fractures need fracking after all .
Your expectations don’t seem to be linked to the numbers of loaded lorries coming out of HH, Jono.
Funny how the antis have to revert to the fracking phrase at times of stress. The Weald antis comfort blanket whilst occasionally denied at the same time on DoD. An interesting combo.
Jono
I do not see how fracturing would solve the ‘lack of maturity’ in this case.
Jono-with your guessing and expecting you seem to fit the ideal profile to be an investor in Angus!
Do you consider Angus Energy to be “antis”?
Their RNS from 28 June 2019 states; “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.”
This was always the case with the Kimmeridge Clay Formation. The penny has finally dropped with Angus, one day it might with you and you may come to realise why at Horse Hill oil can flow from a well drilled through the rubble zone around a fault, but will decline rapidly. In other circumstances, commercial hydrocarbon flow will be not established from the Kimmeridge layer without stimulation, this is the lesson from the Bakken formation, where HVHF is the best available technique. The Bakken formation is the best analogue for the KCF.
That is why there are all the “Frack Free” groups in the Weald, and maybe the penny will also drop that they have done better research than the “mug punters”, to coin the phrase.
As one Angus investor puts it “I bet David Smythe is laughing his tits off”
Shame your speculation is already out of date Dorkinian. Well, actually the real shame is that you still think others will not notice that.
Shame you contradict DoD who have been at pains over sometime to deny fracking is being referenced within the Weald.
Now, I have been the first to accept that horizontal drilling is needed at HH to really get clarity, and that will start soon. I will patiently wait and watch to see what emerges. I hope I will not be like BOW and found to be watching something that was not even there to watch. Neither will I speculate on what has yet to be established. There are plenty who will do that, be showed to be incorrect and yet will continue along the same path.
The real reality is that HMS Duncan is being sent to the Gulf for what? A holiday? Surely it does not mean UK energy supplies are not as secure as some were foolish enough to suggest? Good job hundreds of new blocks in N.Sea and W. Shetland have also been released.
If anyone can follow what Martin means, please translate the first 3 paragraphs, it’s reads like gobbledegook to me.