FOGL: Scotia Results Do Not Confirm Commercial Discovery
Falkland Oil and Gas (FOGL) reported Tuesday that its Scotia well offshore from the Falkland Islands in the South Atlantic has encountered "strong gas shows" but looks to be not commercial.
The firm said that after penetrating the mid-Cretaceous aged reservoir objective the 31/12-01 well encountered strong gas shows while drilling the target section. Interpretation of wireline log data indicates that the target interval from a depth of 15,483 feet encountered approximately 164 feet of hydrocarbon-bearing fine grained sandstones and claystones.
FOGL added that the wireline logs indicate that the sandstones form a "fairly poor quality reservoir", although some zones have up to 20-percent porosity. Other thin hydrocarbon-bearing sandstones were encountered beneath the main target between 16,076 and 16,943 feet. Meanwhile, subsequent evaluation of the main interval using a wireline formation-testing tool did not flow hydrocarbons, indicating the reservoir has low permeability.
Although the well will be plugged and abandoned during the next 10 days, FOGL noted that the Scotia well has proven a working hydrocarbon system in the mid-Cretaceous Fan play and has also demonstrated that Scotia is a viable stratigraphic trap.
"The results of the Scotia well provide further endorsement of the hydrocarbon potential of the South and East Falkland Basin and have proven the presence of hydrocarbons within the mid Cretaceous Fan Play," FOGL Chief Executive Tim Bushell commented in a company statement.
FOGL added that the PGS M/V Ramform Sterling vessel will soon arrive in the Falklands in order to begin a 3D seismic data acquisition campaign.
However, oil sector analyst Brendan Long, of London-based Merchant Securities, took a dim view of the news. "The immediate result is a disappointment as the well did not confirm the presence of oil or high quality reservoir. The stratigraphic trapping system was effective and a working petroleum system has been confirmed, albeit a gassy one," he commented Tuesday in a brief note on FOGL.
The oil potential around the Falklands has begun to attract international firms to the region. In August this year, FOGL signed a major deal with U.S. exploration and production firm Noble Energy that saw Noble farm into FOGL's 'Northern Area' licenses in the Falklands.
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