Hurricane significantly reduces basement play contingent resources

Hurricane significantly reduces basement play contingent resources

In a press release, the company pioneering the West of Shetland Basement Play reports on a material downgrade of expected volumes.

In a press release, the company pioneering the West of Shetland Basement Play reports on a material downgrade of expected volumes.

Since announcing a Technical Review on 8 June 2020, a strengthened Hurricane sub-surface team has performed a comprehensive reassessment of the Lancaster field.

The Lancaster field is more complex than previously thought. Preliminary analysis suggests that rather than being primarily a basement reservoir, Lancaster has important oil-bearing sandstones onlapping the basement flanks, which may contain significant volumes of oil. Further work is required in order to understand their impact on current reservoir performance and their ultimate potential.

The Lancaster oil water contact (“OWC”) is now estimated to be at 1,330 metres TVDSS, compared to the range of 1,597-1,678 metres TVDSS in the Company’s 2017 Competent Person’s Report (“2017 CPR”). This shallower OWC is consistent with the observed earlier and higher water production, and more rapid reservoir pressure decline, than was originally anticipated.

Reflecting these new technical interpretations, the Company’s unaudited estimate of recovery from the two existing Lancaster Early Production System (“EPS”) wells assuming no further activity has been reduced to 16.0 MMbbls from 37.3 MMbbls. Considering oil produced to end August 2020, remaining 2P reserves at 1 September 2020 are estimated at 9.4 MMbbls (subject to economic limit test).

Consideration of near-term future activity is being focussed on means to provide reservoir pressure support primarily by water injection, which if successfully implemented could significantly add to reserves, and/or targeted development of the onlapping sandstone reservoirs.

Reflecting these new technical interpretations, the Company’s unaudited estimate of 2C contingent resources in the Lancaster field has been reduced to 58 MMbbls remaining from 486 MMbbls in the 2017 CPR.

The Company’s estimate of the OWC in the Lincoln field is now 1,846 metres TVDSS (± 50 metres), compared to a range of 2,109-2,325 metres TVDSS estimated in the Company’s 2017 West of Shetland Assets CPR (“2017 WoS CPR”). Accordingly, the Company’s unaudited estimate of 2C contingent resources for the basement alone in the Lincoln field has been reduced to 45 MMbbls gross, compared to 565 MMbbls gross in the 2017 WoS CPR.

More definitive estimates of the range of reserves and resources will be made available in an updated CPR in Q1 2021.

PRESS RELEASE

Hurricane is presenting at the upcoming Digital NCS Exploration Conference: Lancaster – Application of Diffraction Imaging to Fractured Basement Reservoirs. Have a look at the programme here.

X