15 wells would be drilled in a decade in a rural part of East Yorkshire, according to a plan by Rathlin Energy for its West Newton gasfield in East Yorkshire.
The proposed wells, pipeline and wellsite facilities are estimated to cost nearly 400m Canadian dollars ($CAD)or around £260m.
The details were included in a report commissioned by the company and published on investor websites this morning.
The report said drilling was scheduled to start in June 2023 and end in November 2033.
Gas production would begin in 2026, with other wells coming on stream every year until January 2034. Under a best case, it predicted production would continue until 2052.
This is the latest expansion of Rathlin’s plans for the West Newton area, in licence area PEDL183.
In June 2022, statements to investors revealed plans for eight wells at West Newton.
Then, the company said these new wells could extract all the recoverable gas from the field, estimated then at 203 bcf (billion cubic feet).
Since 2013, Rathlin Energy has drilled two wells at West Newton-A and one vertical and a sidetrack at nearby West Newton-B.
The company currently has planning permission for production from six wells at West Newton-A. West Newton-B site has permission to drill one more well but not to produce. Neither site has permission for hydraulic fracturing.
Earlier this month, Rathlin announced it had switched its focus back to gas, after pursuing oil for three years.
The latest predictions were in a competent person’s report (CPR), a specialised appraisal of oil and gas prospects.
The report, from the Canadian company, RPS, reproduces Rathlin Energy’s West Newton Development Plan.
This estimates the company will spend $CAD19.1m (more than £12.5m) for each for the first five wells and another $CAD92.25m (£60.78m) for wellsite facilities and a gas pipeline that would connect the sites to the national transmission system.
The remaining 10 wells, including pipeline and wellsite facilities, are estimated to cost $CAD20.7m each (£13.64m).
Well abandonment and reclamation costs are estimated at $CAD0.91m per well, totalling more than $CAD13.5m (£8.89m). An extra $CAD1.5m would be spent on abandoning and reclaiming any gas plant at the end of the life of the project.
The CPR estimates the best case for technically recoverable gas is 197.6 billion cubic feet from the Kirkham Abbey formation. It puts the geological chance of success at 85%.
The best estimate is that this would raise revenues of US$396.1bn (about £361bn), it said.
The CPR said the best development strategy for the target formation, the Kirkham Abbey, would be to “horizontal wells with (small) multi-stage stimulations”.
Modelling has assumed the wells would be 1,500m long.
There is no reference in the CPR to fracking but stimulation is mentioned nine times.
The CPR said:
“Rathlin believes that they are extremely close to realizing commercial production in the West Newton area by employing horizontal wells using high quality drilling and completion fluids and small, optimized stimulation, as necessary.”
The CPR commented on Rathlin’s proposed schedule in the development plan:
“[It] allows for adequate time for the required drilling approvals and the completion of additional technical work … to mitigate the remaining risks associated with establishing commercial flow rates through reservoir stimulation.”
We have previously asked Rathlin Energy what is meant by optimised stimulation treatments. The company has not responded.
Ellerby, Spring Hill and Withernsea
The CPR also said there were “substantial” additional prospective resources in PEDL183 at Ellerby, Spring Hill and Withernsea.
This recoverable resource was estimated at 363.7 bcf. The geological chance of success for this gas was put at 43%.
Shares in Rathlin Energy partner companies fell during the day.
Union Jack Oil, which has a 16.665% stake in PEDL183, saw shares closed down more than 6% at 29.50p.
It said the CPR concluded that West Newton was “a highly valuable onshore project with resources comparable to those usually reported for offshore developments and at a time when forward gas pricing is higher than oil.
David Bramhill, Union Jack’s executive chairman, said:
“Such a significant domestic onshore gas resource as West Newton will be an important transition fuel in helping the UK achieve its 2050 Net Zero targets.”
Shares in Reabold Resources, which has interests in both PEDL183 and Rathlin Energy, fell more than 13% to 0.24p.
The company said the CPR validated its view that West Newton was a “strategic asset that can play an important role in improving the UK’s security of supply”.
Reabold’s co-chief executive, Stephen Williams, said:
“We are very excited by the prospective resource potential from Ellerby, Spring Hill and Withernsea, which combined are potentially larger than West Newton, and we would note that there remains considerable further running room on the licence beyond that covered by the CPR.”
Rathlin Energy has not mentioned the CPR on its website. Last week. it published notes from a recent community liaison group. There is no reference in the notes to an additional 15 wells. It did say West Newton had the potential to meet the daily gas demands of more than 380,000 homes for “many years to come”. It did not say how long a period that was.
Updated to correct conversion from Canadian dollars to pounds