The technical team reviewing the Seven Heads reservoir has not completed its work, but believes it is likely that water that has condensed from the gas and a small amount of formation water are building up in one or more of the well bores, thereby masking reservoir pressures and aggravating the decline in production.
In consultation with our partners and Marathon, we are developing plans to embark on a diagnostic "blow-down" program which will involve all five of the Seven Heads wells being shut in. A temporary connection to the compressors on Marathon's Kinsale "A" platform will then be used to reduce the pressure in the pipeline connecting Seven Heads to the platform. Once this has been done the Seven Heads wells will be re-opened. This should result in a surge of production that will quickly remove any water that has built up in the well bores. The blow-down program is currently scheduled to commence later this week and should take around five days to complete.
The data obtained during this process should allow an improved measurement of reservoir pressures, and will be invaluable in helping to determine the future deliverability and recoverable reserves of the field. It is anticipated that this process will at least temporarily increase production rates and may be repeated periodically to clear water from the well bores until a permanent solution can be assessed.
Longer term plans will be based on the data gained from the blow-down process and on final technical assessments. We are also investigating a permanent arrangement to access one of the three compressors already in place on the Kinsale platform which could be adapted to facilitate Seven Heads gas flows.
Ramco's Gas Sales Agreement volumes apply until the end of September 2004; thereafter Ramco can adjust nominations for the next gas year to better match the field's expected performance. Since the last announcement, Ramco has put additional back up transportation arrangements in place for the period ending September 30th 2004, which cover gross field production rates down to 35 mmscf/d. The total cost to Ramco for all of the back-up transportation arrangements now in place is £3.7 million.
A further announcement will follow the completion of the blow-down and assessment of the results.
The Seven Heads partners are Ramco as operator with 86.5%, Island Petroleum Developments Limited with 12.5% and Sunningdale Oils (Ireland) Limited with the remaining 1.0%.
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