Dana Petroleum Raises Concerns Over EnQuest North Sea Discovery

Dana Petroleum Limited has raised concerns over EnQuest’s recently drilled Eagle exploration well in the central North Sea.

The wholly owned subsidiary of the Korea National Oil Corporation (KNOC) stated that it has a 50 percent ownership interest in the Eagle well discovery, despite EnQuest’s claim that it had drilled the well on a 100 percent interest basis.

Dana had asserted that EnQuest did not have the authority to spud the well prior to the commencement of drilling operations, according to a company statement, although operations subsequently proceeded.

“It remains Dana’s position that it has a 50 percent ownership interest in the Eagle well discovery and it has reserved its rights under the relevant license, under the Joint Operating Agreement and at law,” said a Dana Petroleum statement on the company’s website.

EnQuest was not immediately available for comment when contacted by Rigzone.

It was revealed July 1 that EnQuest had discovered oil at the Eagle exploration well, with preliminary analyses indicating that an oil bearing reservoir with a vertical thickness of 67 feet and “excellent reservoir properties” was found.

No oil water contact was encountered at Eagle, representing potential upside volumes on the flank of the structure, and the company anticipates gross total recoverable reserves to be of a similar size to those in the nearby Gadwall producing oil field.

Gadwall is part of the Greater Kittiwake Area and was successfully returned to production by EnQuest last year. It is estimated that total gross ultimate recovery from Gadwall will be approximately 6 million stock tank barrels of oil. EnQuest undertook the drilling of the Eagle exploration well in the second quarter of this year. Eagle was acquired along with EnQuest’s other interests in the Greater Kittiwake Area in 2014.

Dana Petroleum stated that it “looks forward to the further evaluation of the Eagle results in due course”.

Market reaction to EnQuest’s news July 1 was described as “positive” by FirstEnergy, although the oil and gas advisory firm said that it was carrying Eagle as a larger prospect with 20 million barrels of gross resources instead of 6 million barrels. FirstEnergy stated, however, that investors would most likely welcome news of the addition of a few million barrels of reserves.

Following Dana’s update, FirstEnergy has stated that market reaction to the news was “slightly negative” and would continue to be “until further visibility is provided”.