Large amount of 2020 well deferrals both in UK and Norway

Large amount of 2020 well deferrals both in UK and Norway

Although activity on the NCS may still seem buoyant compared to the UKCS, well deferrals in both areas is high according to Westwood Global Energy’s analysis.

Although activity on the NCS may still seem buoyant compared to the UKCS, well deferrals in both areas is high according to Westwood Global Energy’s analysis.

At the start of the year, the number of wells expected to be drilled across both the UKCS and the NCS reflected a return of confidence in the sector. In the UK, Westwood Global Energy expected 29 E&A wells to be drilled this year, which is in line with the 32 well expectation of the OGA at the end of January. In Norway, 53 E&A wells were expected to be drilled, compared to 50 wells forecast by the NPD.

In both cases, this meant an increase on 2019 activity where 27 E&A wells completed in UK and 49 in Norway, and an even bigger contrast to 2018 when the UKCS only saw nine completions and 33 in Norway.

However, with the Covid-19 crisis kicking in and the associated drop in oil price, the goal posts have dramatically shifted. Westwood Global Energy now expects a maximum of nine E&A wells to be drilled in the UK, which equates to an almost 70% drop in wells being drilled. In Norway, 34 E&A wells are expected to be drilled this year, which means a 35% drop.

If the oil price continues to rise and confidence returns, next year promises to be a busy time in both the UK and Norway. Combined with wells that were already planned for 2021, 19 have been deferred from 2020 to 2021 in the UK and 20 in Norway.

Alyson Harding of Westwood Global Energy said: “Although there were many deferments in the first half of the year, there have recently been wells that have been returned to the 2020 drilling schedule, including Equinor’s 7018/5-1 Spissa and Vår Energy’s 25/8-20 King/Prince. These tentative steps suggest that some operators are feeling more comfortable with drilling in this COVID-19 environment.”

Examples of wells having been deferred are:

UKCS:

15/29c-L, Greenwell, Zennor

14/14b-D, Goose, Azinor

48/8b-C, Selene, Shell

30/8-D, Dunnottar, Chrysaor

205/26b-N, Lincoln (appraisal), Hurricane

NCS:

25/11-AH, M12, Vår Energi

7234/6-1, Stangnestind, Aker BP

7322/6-1 S, Shenzhou, Equinor

35/9-16, Hamlet, Neptune

17/8-A, Dovregubben, Lundin

HENK KOMBRINK

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