The first of eight new horizontal wells to exploit the West Newton gasfield in East Yorkshire could be drilled within months, it was revealed today.
Statements to investors said the first new appraisal well was planned for January-June 2023.
Four more wells could then be drilled, the statements said, followed by another three in 2028-2030.
The news is likely to concern some local people, who twice opposed planning permission for more drilling at the West Newton-A site.
The site operator, Rathlin Energy, scaled back its proposals for West Newton-A last year, after an initial scheme for six new wells was refused planning permission by East Riding of Yorkshire Council.
Earlier this year, the company received permission for four new wells and 20 years of production at West Newton-A. The nearby West Newton-B site has consent for one more well.
“Eight new wells could extract all recoverable gas”
The plan, based on studies of exploration so far at West Newton, predicted that the eight new wells would extract all the recoverable gas from the field, estimated at 203 Bcf (billion cubic feet). The field was also said to contain 35 million barrels of oil.
According to the conceptual development plan, the first five wells would produce 44 million cubic feet per day of sales gas (methane processed to remove liquid petroleum gas, condensate and carbon dioxide). The later three wells would maintain production at that level, it said.
The first formal gas production was anticipated by 2025, the plan said.
Neither of the West Newton sites is currently connected to the gas grid. A pipeline connection would need planning permission and other consents.
Any gas resulting from well tests before a pipeline was constructed would have to be either compressed and transported by road tanker or flared. The impact of West Newton-A’s expansion on local rural roads was a key reason for the first refusal of planning permission.
The conceptual development plan expected all the wells would be horizontal. This follows the results of tests which showed that the existing vertical wells failed to produce consistent flows of gas and oil.
An update published today by Rathlin Energy did not refer to the conceptual development plan or the number of new horizontal wells it proposed.
But the update did say the first well was likely to be drilled at West Newton-B.
It said modelling had shown that horizontal wells, which gave the wellbore greater access to the target formation, should allow for increased flow of gas and oil.
Rathlin Energy also said the main target reservoir, the Kirkham Abbey, was very sensitive to water. As a result, water-based drilling muds, which had been used in the field so far, had caused damage to the wellbore.
Rathlin said acid treatments of the well had made things worse:
“This has been compounded, rather than remedied, by the use of water-based acids during the completion programme. The conclusion is that drilling with oil-based muds through the reservoir section should minimise any formation damage, allowing the oil and gas to flow into the wellbore more freely.”
Rathlin Energy will need to apply to change its environmental permits for both West Newton sites to allow the use of oil-based muds.
The company also said additional studies were underway to determine if well completion programmes could be “optimised” to improve flow rates of gas and oil.
DrillOrDrop asked Rathlin Energy today whether it would need to apply for planning permission for three of the eight wells referred to in the conceptual development plan.
We asked the company what it meant by optimised well completion. We also asked whether this could include proppant squeeze, a form of mini-fracking.
The company has said the Kirkham Abbey formation is naturally fractured, so we asked why optimised well completion was necessary.
Rathlin Energy did not respond to our questions.
Estimates and predictions
The conceptual development plan estimated that the gross cash flow from the field would be US $1.3 billion.
Capital spending of US $139m would be needed for drilling and completing the first five wells, as well as on production facilities and a connection to the gas grid, it said. The final three wells would be drilled from operating cash flow.
The plan predicted that future gas discoveries within the wider area could be “tied-in” to infrastructure at the West Newton sites.
Stephen Williams, co-chief executive of Reabold Resources, said:
“These studies are the beginning of an exciting new chapter for this project, which we expect will see Reabold drilling multiple, high-impact wells at West Newton in the coming years.”
David Bramhill, executive chairman of Union Jack, said this was the start of “an exciting new drilling phase for West Newton”. He said
The project could “deliver substantial volumes of low carbon sales gas into the UK’s energy market and could also facilitate further exploration activity and development potential within the Greater West Newton area”.
Shares in Reabold Resources closed down 9.38% today. Union Jack Oil closed down 3.6%.
The We Said No campaign, based in mid-Holderness, said today:
“As usual, Rathlin Energy are changing the goal posts and totally disregarding the local community’s fear and anguish over this massive expansion.
“It has always been a mission creep with Rathlin. They told a potential new resident a few years ago that there were no plans to go back to West Newton A. So they bought their dream home and are now living in the shadow of their plans.
“And now Rathlin say they are planning to extract gas. There is no infrastructure to support this. A pipeline has been ruled out by them before and will cost a huge amount of money which is not feasible.
“We remind people that they have not produced anything from either site and need to continue to explore using more extreme methods of extraction.
“Using oil based muds poses an even higher risk to aquifers. We hope that the EA finally do the right thing and refuse permits for this latest permit variation. The residents of Holderness said no for good reason.”
DrillOrDrop is seeking more reaction to the plans for West Newton
Rathlin Energy’s update also said the company was in talks with East Yorkshire Council about a community benefit fund for the area around West Newton-A.
The company said it would begin making contributions when construction work began at the site. Further contributions would follow for each new well drilled, and throughout production.
The fund can be used to support a wide range of projects. These included development and maintenance of carbon sinks; energy generation and efficiency projects that relieve fuel poverty; improving local disability access; advancement of education, environment protection, arts, culture, heritage, science and community development.