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 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