Borders & Southern Finds Hydrocarbons South of Falkland Islands
by Jon Mainwaring
|Monday, April 23, 2012
Falkland Islands explorer Borders & Southern announced Monday that it has made a "significant gas condensate discovery" with its 61/17-1 well on the Darwin East prospect in the South Falkland Basin.
The well, located some 90 miles southeast of the Falkland Islands in the South Atlantic, was drilled to a total depth of 16,000 feet (4,876 meters). As it was drilled, it encountered good hydrocarbon shows from 15,200 feet to 15,780 feet (4,633 meters to 4,810 meters), with the main reservoir interval comprising good quality massive sandstone and found to be 277 feet (84.5 meters) thick with net pay of 222 feet (67.8 meters).
Fluid samples from the reservoir have been recovered and will be bought back to the UK for analysis.
Meanwhile, Borders intends to complete wireline logging operations, plug and abandon the well and move its Leiv Eiriksson rig (DW semisub) on to the Stebbing prospect – the second target that Borders & Southern is drilling this year in the South Falkland Basin.
"We're delighted to have made a discovery with the company's first exploration well and to have opened up a new hydrocarbon basin. There is clearly a lot of work ahead of us to understand the size and value of the discovery, but it is a great start and the potential of the basin is exciting," said Borders Chief Executive Howard Obee.
But oil analysts who follow Falklands explorers were less enthusiastic about the result.
"Borders & Southern's bravery in executing a drilling campaign with 100-percent equity has paid off on this occasion and the rig will now move onto the Stebbing prospect which is targeting 1.28 billion barrels of oil equivalent of prospective resources and is de‐risked as a result of the Darwin discovery," said London-based investment bank Westhouse Securities said in a research note Monday, before adding: "Despite the very positive nature of today's announcement for the Falklands Islands and its embryonic oil industry we believe that several more discoveries of this nature will need to be made in order to justify a 'mini‐Aberdeen' adjacent to Port Stanley."
Focusing on the Darwin East prospect itself, Merchant Securities said that the question now becomes one of assessing whether the liquid content in the gas will be sufficient for the reservoir to be commercially viable on a liquids-only basis. "We are very cautious about arriving too early at a positive conclusion for the commerciality of the condensates," added the broker in a note to its clients.
Borders is not the only company carrying out exploration in the South Falkland Basin. It is sharing the Leiv Eiriksson rig with Falkland Oil & Gas, which is set to drill two of its prospects – Loligo and Scotia – later this year.
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