An exploration company has told investors about plans to drill next year at a second site at West Newton in East Yorkshire.
Reabold Resources, which holds 35% of the site operator, Rathlin Energy, confirmed today it was in “advance discussions” to invest another £16m in cash and raise its stake up to almost 75%.
Last week, Reabold said it was “taking indications of interest from investors” for an equity placing of between £20m-£24m.
It said part of the proceeds would be used to “accelerate the permitted, two well work programme at the West Newton project”.
Today, a company spokesperson confirmed that Reabold had scheduled drilling two wells at the West Newton-B site, north of Hull, in 2020.
Once drilled, this would bring the total number of wells across two sites in the area to four.
The latest statement followed the publication online of extracts from a Reabold Resources presentation. They indicated that a vertical well would be drilled at West Newton-B in the first quarter of the year. A second, horizontal well, would be drilled in the second quarter.
The wells have had planning permission since June 2015 but no work has been carried out at the site, apart from an archaeological survey.
Rathlin Energy has been exploring for hydrocarbons since 2013 at the original West Newton site, known as West Newton-A. The targets for two wells there were the Kirkham Abbey and Cadeby formations
According to the presentation extracts, the focus would now turn to the nearby West Newton-B. Reabold listed the key operations:
“Drill first well from West Newton B site, appraising Kirkham Abbey and targeting the Cadeby in a more optimal location
“Success in the Cadeby may lead to a refocus on that horizon, given its potential scale
“Current plan is to drill a second well at the West Newton B site to optimise appraisal of the Kirkham Abbey”
“Flow tests at West Newton B site to assess likely deliverability of development wells”
Another extract said:
“Two further wells permitted at West Newton B site, optimally located to define the deeper Cadeby oil play. Next well focussed on Cadeby reef flank: 24%CoS1 for NPV1 $850m ($340m – $425m net2), as well as intersecting the Kirkham Abbey.
“Cadeby intersected in A-2 well and oil bearing: reservoir quality (porosity), as expected, as poor. Seismic and geological model indicate significantly better reservoir quality at West Newton B location”
Results from drilling at West Newton-A earlier this year indicated the presence of oil, as well as the expected gas. Reabold described the find as “potentially the largest UK onshore gas field and potentially the largest hydrocarbon discovery onshore since 1973.
The new Reabold presentation added:
“The shift to oil from initial expectation of gas, as well as significant local infrastructure, increases potential for early monetisation through oil sales ahead of field development”
“Drilling and testing will help refine future work programme and move West Newton towards a field development plan.”
Flow testing at West Newton-A
Flow testing on the second well at West Newton-A was suspended in late August 2019. Rathlin Energy said this was to analyse data and revise the well test to take account of the oil find.
Since then, equipment has been removed and there has been no activity at the site. DrillOrDrop understands that, as of last week, Rathlin Energy had not yet given the required 21 days notice of operations to one of the key regulators.
West Newton-B timeline
4 June 2015: East Riding of Yorkshire Council grants planning permission for exploration site and two wells at West Newton-B. Details
16 June 2015: Date of decision document granting planning permission and conditions. Link
2 August 2016: Environment Agency grants environmental permit. Details
6 December 2017: Rathlin tells residents that work on access road is due to be completed by end of March 2018. Details
6 November 2018: Rathlin Energy tells East Riding of Yorkshire Council “the merits of drilling the second well from West Newton-A are significant and represent the best option to move the project forward”. Details