Industry

Oil partners “optimistic” about finding oil with Biscathorpe sidetrack

190106 biscathorpe eddy thornton 2

Biscathorpe oil exploration site, Lincolnshire, 6 January 2019. Photo: Eddie Thornton

An oil formation in Lincolnshire, missed by a well drilled last year, could be reached by a new sidetrack, a group of companies said today.

The Biscathorpe-2 well near Louth was suspended in 2019 after it failed to find the expected oil reservoir in the Westphalian sandstone.

But a statement from the site operator, Egdon Resources, today said a sidetrack from Biscathorpe-2 could reach a potentially commercially-viable part of the formation, identified by reprocessed seismic data.

The sidetrack would also target an oil column in the underlying Dinantian Carbonate, Egdon said.

The joint venture partnership, which also includes Union Jack Oil, Humber Oil & Gas and Montrose Industries Limited, had completed an “extensive and detailed studies” of the Biscathorpe project, Egdon said.  254km of 3D seismic data had been reprocessed and remapped, it added.

Egdon said the results had “significantly improved understanding of the prospectivity” in the Biscathorpe project area.

“The results of this substantial piece of work have concluded that a possible material and commercially viable hydrocarbon resource remains to be tested.”

Mark Abbott, Managing Director of Egdon Resources plc, said:

“We are highly encouraged by the post-well evaluation of the Biscathorpe project area which has now benefited from an integrated assessment of the 2019 well data and reprocessed 3D seismic data. This work has concluded that a potentially material and commercially viable hydrocarbon resource remains to be tested.

“Having retained the wellsite, the JV [joint venture] has maintained its optionality to pursue a cost effective side-track to test the resource potential of not only the Basal Westphalian Sandstone play but also to appraise the oil column demonstrated in the deeper Dinantian Carbonate reservoir.”

David Bramhill, executive chairman of Union Jack Oil, said:

“We are highly encouraged by the conclusions of this detailed review of data in respect of Biscathorpe, particularly given the attractive resource volumes and values associated with the Westphalian and Dinantian targets.”

He said the data upheld Union Jack’s view that the licence area, PEDL253, remained what he described as “one of the UK’s largest onshore un-appraised conventional hydrocarbon licences”.

Mr Abbott described the Biscathorpe oil accumulation as “potentially significant”.

The company estimated the mean prospective resources associated with the Westphalian target at 3.95m barrels of oil. The best case was estimated at 6.69m barrels. Egdon said the Westphalian target was “economically robust” at the current oil price and would break even at US$18.07 per barrel.

The mean stock tank oil initially in place in the Dinantian was estimated at 24.3m barrels, with a best case at 36m barrels.

Egdon shares closed up 10.26% at 2.15p. Union Jack shares closed unchanged at 0.095p

In May 2018, Egdon was granted an extension of planning permission for the Biscathorpe site until December 2020. But the original permission, granted in 2015, was for a single exploratory borehole and planning documents in the application did not refer to a sidetrack well. Egdon cited low oil prices for the delay in drilling Biscathorpe-2.

5 replies »

  1. Hmm. Looks as if some of the UK on shore companies could do with some expertise in priority management. Nice problem to have.

    Should also allow some tight cost control through the possibility of a forward schedule of contracts.

    Seems all low hanging fruit may NOT have been exhausted.

    Good job Egdon have the following under their belt:

    “There is no suggestion that this proposal would increase the use of hydrocarbons, and the evidence demonstrates that the effect would be simply to transfer production to a more local source.”

    • From:
      Damian Kahya
      Greenpeace
      Unearthed

      “Car industry calls for EU climate targets to be delayed due to Coronavirus.
      Criminalising anti fossil fuel protest.
      Japan announces rubbish targets.
      Barclays targets net zero limits by 2050.
      The oil industry turns to production cuts.
      Shell pulls out of a Major Liquidise Natural Gas Project.
      What kind of stimulus the economy will get.
      Campaigner Justin Guay lays out the options. Indonesia risks timber trade with EU after scrapping license rules.
      A weak global economy also threatens investment in renewable energy sources.”

      “The car industry is pushing for the implementation of EU climate targets to be delayed due to the Coronavirus crisis, which has seen the sector’s sales plummet and its production severely disrupted.In a statement to Unearthed, German automaker VW said: “the conditions for achieving the targets are becoming more demanding.”

      “It’s an admission that comes on the heels of a letter sent to EU Commission President von der Leyen earlier this week in which the auto industry’s largest associations said the pandemic and consequent shutdowns across the continent mean that compliance with the years-in-the-making regulations should be postponed.”

      “US to announce massive roll-back of car pollution rules:”

      “Speaking of…The Trump administration is expected on Tuesday to announce its final rule to rollback Obama-era automobile fuel efficiency standards, relaxing efforts to limit climate-warming tailpipe pollution and virtually undoing the government’s biggest effort to combat climate change.”

      “President Trump is expected to extol the rule, which will stand as one of the most consequential regulatory rollbacks of his administration, as a needed salve for an economy crippled by the pandemic.”

      “The news comes as Huffpo reports that US states are quietly passing laws criminalising climate protests. At least three states passed laws putting new criminal penalties on protests against fossil fuel infrastructure in just the past two weeks amid the chaos of the coronavirus pandemic.”

      “Japan announces rubbish climate targets: ”

      “Japan has laid out its plans to tackle greenhouse gas emissions under the Paris agreement in the run-up to UN climate talks this year, becoming the first large economy to do so – but it’s not an amazing sign. Japan’s carbon targets – known as its nationally determined contribution (NDC) in the UN jargon – as announced on Monday morning are almost unchanged from its commitments made in 2015 towards the Paris accord – implying a trajectory towards 3 degrees of warming.”

      “Barclays targets net-zero emissions by 2050: ”

      Barclays, the largest financier of fossil fuels in Europe, has become the first big British bank to target net-zero carbon emissions by 2050, following a pressure campaign from shareholders and activists.”

      “The only snag? There are no details on how, or when before 2050, this will happen. Lankelly Chase, a charitable foundation and one of the parties that filed the shareholder resolution, criticised the bank for proposing its own resolutions rather than backing the shareholder one.“By declining to support our resolution and proposing a long-term ‘ambition’ instead, Barclays may hope to gain plaudits,” it said. “Investors should note that the UK government has already enshrined a commitment to net-zero by 2050 in law and that Barclays is merely repeating undertakings it has made under the Principles for Responsible Banking.”

      “Oil industry turns to production cuts: ”

      “Faced with plummeting prices (though not yesterday) and overwhelmed storage the oil industry is finally looking at cutting production. “Demand is now down by as much as a quarter, or roughly 25m barrels a day.”

      “That is close to what Opec countries produce every day, or as if the US, Mexico and Canada had abruptly stopped consuming oil altogether. Storage facilities will soon be overwhelmed, say, analysts, unless the industry can find a way to cut output at a scale never managed before,” the FT notes whilst Bloomberg reports that two shale oil drillers are calling for a government-led US cut of 20% in output from Texas shale.”

      “In related news, Shell has pulled out of a major Liquified Natural Gas project – putting the whole thing in jeopody. Closer to home the FT reports on the industry in the North Sea where companies are grappling not just with the falling price, but with the virus itself and protecting workers forced to live and work in close proximity with each other.”

      “Brazil thanked Johnson for a response to Amazon fires: ”
      “Days after the G7, the Brazilian ambassador “thanked the prime minister for his stance at Biarritz, and said it had not gone unnoticed in Brasilia”

      “Indonesia risks timber trade with EU after scrapping license rules: Indonesia’s trade ministry says it’s scrapping the SVLK requirement for exporters in a bid to boost business amid a slowdown caused by the COVID-19 outbreak.”

      “An Australian scientist has warned that falls in air pollution during the crisis may be more than balanced by an increase afterwards – if the 2008 economic collapse is anything to go by. “During the global financial crisis, a brief drop in greenhouse gas emissions was more than offset by a sharp rebound in pollution as the world economy recovered.”

      “A weak global economy also threatens investment in renewable energy sources, particularly given the availability of cheap oil. There is also a risk that environmental policies will be relaxed during this time of crisis, as is already starting to happen in the US. Enforcement may also become more difficult.”

      “Which – again – brings us to the question of what kind of stimulus the economy will get. Campaigner Justin Guay lays out the options fairly well here, I think, in his Medium blog”

      “This event could lead to a wave of bankruptcies that accelerate the arrival of peak fossil fuels. Or It could lead to dramatic state intervention that papers over the glaring weakness’ in the fossil fuel industry creating a zombie industry forever dependent on state aid for survival. It could even lead to a wave of nationalization of key companies and sectors opening the door to a managed transition.” See above or a best guess on which way we’re going right now.”

      “And finally, the New York Times zooms in on the kind of small, but important, scheme being derailed by the crisis. A competition for the best way to remove carbon dioxide from air – one contestant wanted to turn it into vodka……”

  2. And, when the pandemic is over, the world will return to “normality” with a huge bill, and dearer petrol. So, existing technologies will still be required and maybe less money-for a while-for new technologies. Struggling companies cut R&D. Interesting UK has planned to increase R&D but will that be delivered now?

    Mercedes will return to racing cars instead of making medical devices, Ineos may find their production of hand sanitizer is not in great demand, General Motors may stop making ventilators and return to other products. There will possibly be a very wealthy US vaccine manufacturer, and some who thought US Pharma were nasty may have changed their minds, just like they did when the first broad spectrum antibiotic was supplied to the world in the early 1950s.

    Consolidation of many key sectors as the strongest see opportunities and the weakest are gobbled up, or disappear. Some with State
    intervention, some without.

    1946 saw something similar. Not sure though that this time round the USA will restart the world economy. Perhaps China? LOL. Whoever it is will require it to be on their terms, and the key one will be access to markets.

    My freezer has space for a few US lactic acid bathed chickens. I suspect many might be in a financial situation where that is more of an option than a leg of organic, free range, reared on a diet produced in Tibet, played music during their long and happy lives, and flown around in a chartered jet so they have experienced flight.

    Life is full of challenges. Will be interesting.

  3. Some great podcasts out there to listen to. Two of those are “Drilled” and “Heated”. “Drilled” is about the oil and gas industry particularly fracking, and has some really interesting insights into what the oil and gas industry is really getting up to, or rather down to. “Drilled” is in its third series now, so its worth trawling back to look at previous podcasts. And “Heated” is is a podcast about climate change and has just started a six part investigation into where we go now after, or when this present pandemic abates. Just set up a free account.

    https://www.stitcher.com/podcast/range/drilled – Heated is being presented with Drilled. There are adverts, but the information is invaluable.

    https://heated.world/p/how-big-oil-defends-itself-to-spooked?token=eyJ1c2VyX2lkIjo1MzYyNDk2LCJwb3N0X2lkIjoyODg2NjAsIl8iOiJsaEhraCIsImlhdCI6MTU4NTY1MDc5NiwiZXhwIjoxNTg1NjU0Mzk2LCJpc3MiOiJwdWItMjQ3MyIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.9Yn0At77RzhGC4MfkYsQp3vZj5W_PyCFWiKAAJsNhI4

    If you are used to podcasts, search your usual podcast provider. if you are not, look at the Driiled podcasts on Googlepodcast, or Stitcher or Apple podcast.

  4. Reduction of carbon emissions and reliance on fossil fuels requires a transition. Part of a transition is countries reducing their need to import oil and gas, hence an increase in locally sourced oil and gas. This leads to the need for companies like Egdon and and projects like Biscathorpe.

    We should be celebrating the step closer to a reduction in carbon emissions from such projects.

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