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.