Sterling has been successful in the UK 25th Offshore Licensing Round awards, which were announced on November 12th by the UK Department of Energy and Climate Change. The blocks awarded are 42/10 and 42/15, which are immediately adjacent to Sterling's existing 12 block position surrounding the Breagh gas discovery. Sterling is to be the operator of the newly awarded blocks and will hold a 60% working interest.
The main attraction with the new blocks focuses on a sizeable discovery on 42/10 in the Yoredale sands (which are geologically similar to the Breagh Reservoir). The 42/10-2z well drilled by Mobil Oil in 1996 tested 8 million standard cubic feet of gas per day (MMscf/d) and was drilled just before the original Mobil Oil well on Breagh (1997), using the same type of water-based drilling fluid which is now known to be less than optimal. The structure is reasonably well defined by existing seismic data which will be supplemented by new data.
In addition, the 42/15a-2 well drilled by Total in 1990, tested gas from the Zechstein formation at 7.6 MMscf/d and 0.15 MMscf/d from the underlying Carboniferous (Scremerston) formation. On Block 42/15, there is also a small Triassic Bunter discovery which tested at 19.6 MMscf/d from the 42/15b-1 well drilled by Total in 1984.
Stewart Gibson, Sterling's CEO, stated, "The award of these top ranked blocks in the 25th Offshore Licensing Round marks a significant achievement by all involved. The concept of developing a greater Breagh area following the significant Breagh gas discovery has been a strategic move by Sterling over the past three License Rounds. The addition of this new area, in concert with the existing discoveries, and following the recent Breagh successes will continue to add momentum to the newly developing infrastructure plans."
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