This evaluation, completed in conjunction with Schlumberger has estimated a potential in situ resource of 9.4 trillion cubic feet of gas, or 1.5 billion barrels of oil equivalent, with a predicted average recovery rate of 40 percent.
Finavera and Schlumberger have completed an analysis of existing data available from previous exploration on this field. Three 'tight' gas sandstone reservoirs have been identified from seismic surveying and 14 vertical wells. The resource estimate of 9.4 trillion cubic feet of gas (TCF) is based on two of the three reservoirs. Schlumberger has indicated that the potential exists for additional significant gas resources in a third higher porosity reservoir.
Finavera is currently engaged in fundraising up to €10 million to carry out seismic analysis and further development. Goodbody Corporate Finance has been appointed as corporate advisors.
Natural Gas in Ireland
Ireland currently imports almost 90% of its gas requirements through two pipelines connected to the United Kingdom, which is also a net gas importer. The recent Russia - Ukraine gas dispute has highlighted the vulnerability of gas supply to European countries. In particular, Ireland's position at the end of the European supply network has highlighted the potential danger to the economy if there is a disruption to gas supplies. The EU has recently urged Ireland to set up a strategic gas reserve as it is one of only three states that does not store gas to provide for emergencies.
Sustainable Energy Ireland, the national energy agency, estimates that Ireland consumed 0.14 TCF of gas in 2004. At an average recovery rate of 40 percent, Finavera's estimated resource of 9.4 TCF has the potential to meet Ireland's gas demand, at current levels, for the next twenty five years.
Tom Davitt, Finavera's Chief Executive Officer, commented "The Lough Allen Natural Gas Field has the potential to change the energy dynamic of Ireland and the UK. There is no doubt that the Irish economy would be in a vulnerable position if there was a serious disruption in supply. The answer to a large part of our security of supply problem could be in the north west of Ireland. It also has the potential to turn Ireland from a net gas importer into a gas exporter.
"We believe the rising price of natural gas, coupled with the proposed application of proven technology, combine to make this a potential asset of international significance. The drilling technology required to extract the gas economically is used routinely and successfully in similar geological settings in North America and Europe but it has never been applied here. The application of this technology has turned previously uneconomic reservoirs into commercial gas fields".
The sedimentary basin in the region was formed in the carboniferous age 350 million years ago. It was once contiguous with the Appalachian region in the USA, a proven natural gas territory. Natural gas was first discovered in the Lough Allen Natural Gas Field more than forty years ago. Since then, 14 vertical wells were drilled with gas discoveries in all of them. However, the attempts made by a number of different companies to extract the gas resource were deemed uneconomic at the time.
The Lough Allen Natural Gas Field is a tight gas basin. It consists of tight gas sandstone reservoirs, which are defined by low permeabilities and porosities relative to conventional fields. Tight gas fields generally have lower daily production rates, but recoveries are consistent over a longer period.
Tight gas reservoirs are becoming increasingly important for exploration and development in North America and Europe due to the global increase in demand for natural gas. Horizontal drilling and hydraulic fracturing technology, generally used on tight gas reservoirs, has never been applied to the Lough Allen Basin.
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