Venture Brings South Sycamore Production Well On Stream
Venture Production provides the following operational update on its UK North Sea operations: Oil Operations (Central North Sea)
The South Sycamore production well (SP-4) (Venture 100%) was successfully brought on stream on 10th December at an initial average rate of over 9,000 boepd. The well was drilled from the Tiffany platform under an agreement with Canadian Natural Resources Limited ('CNR'), the operator of the platform and drilling equipment. Utilising a platform well rather than drilling from a sub-sea location has reduced development costs and enabled the well to be brought on stream ahead of the timetable achievable using a sub-sea tie back.
The central Sycamore water injector well (SW-2) (Venture 100%) was completed in early November and awaits final sub-sea tie-in. As anticipated, the level of depletion encountered suggests there is good reservoir connectivity with the SP-2 production well. Water injection is expected to commence within the next few weeks at a rate of over 10,000 barrels of water per day ('bwpd'). It is anticipated that the provision of water support to the SP-2 production well will enable oil production from this well to be restored during Q2 2006.
Commercial terms have been agreed with CNR to cover the drilling of the Ash
exploration well (Venture 100%), again utilising the Tiffany platform drilling
rig. This well is expected to spud during the second half of 2006. Being a
platform well, if successful, it could be completed as a producer and brought on
Greater Kittiwake Area ('GKA')
Following the successful introduction of water injection support to the reservoir, the Mallard field (Venture 50%) has been brought back on stream at initial rates of up to 15,000 boepd (gross). The reinvigorated performance from Mallard has necessitated the anticipated shut-in of the Gadwall field (Venture 50%), which had been producing at around 8,000 boepd in early November. However, it is intended that Gadwall will be brought back on stream once water injection support has been provided to the Gadwall reservoir through a new water injection well currently being drilled. This well is scheduled for completion by February 2006 and is being drilled by the Sedco 704 rig, which is on contract to Venture through to the end of Q3 2006.
The Kittiwake offshore loading buoy, which is used to export oil to the storage and shuttle tanker from the Kittiwake, Mallard and Gadwall fields (Venture 50%), has recently been replaced by a single anchor loading ('SAL') system. This replaces a piece of aging infrastructure with equipment that will allow greater flexibility in tanker operations and thus improve the producing uptime on the Kittiwake platform. In an innovative contracting arrangement the SAL system now in use at Kittiwake was efficiently sourced from another UKCS field that is no longer producing. Further, Venture was able to install the new system in the field in a very short space of time due to its partnership arrangement with Subsea 7 for the provision of sub-sea construction and engineering services.
The net effect of these developments has been to increase combined production
from the Greater Kittiwake Area ('GKA') by 7,000 boepd gross and the hub is
currently delivering approximately 18,000 boepd gross.
Gas Operations (Southern North Sea)
The second of the two planned Annabel production wells started producing on December 8th at a rate of approximately 50 MMcfpd, increasing Annabel total production to approximately 120 MMcfpd.
The Ann in-fill well is currently drilling ahead and first gas production is anticipated during the first quarter of 2006. Weather related delays have meant that drilling of the well started later than had been planned but the Noble Ronald Hoope jackup is contracted to Venture until the well is completed.
The ConocoPhillips-operated Saturn gas field (Venture 22%), which came on stream in early September, is now producing around 40 MMcfpd net to Venture from two wells, the second well having started producing in late November. The third production well is currently being drilled and is expected to be completed during the second quarter of 2006.
To support the continuing development of its Southern North Sea gas business Venture has recently extended the contract for the Noble Julie Robertson jackup rig by a further 12 months. This rig is scheduled to commence work with Venture in Q2 2006 and the extension takes the contracted period through to at least Q2 2008.
Field development approval to produce the Chestnut field using the SSP300 was announced at the end of November and the field development plan for the Goosander field is currently under consideration by the DTI. In addition, Venture yesterday announced the formation of a strategic alliance with Sevan Marine to re-use the Chestnut SSP300 vessel and take an equity stake in the unit.
Finally, the acquisition of additional interests in the Acorn and Beechnut discoveries announced yesterday brings the total number of incremental transactions announced in 2005 to seven. As a result, in addition to the operational successes delivered throughout the year, the Company now has a deep portfolio of development opportunities with which it can continue to grow reserves and production for the foreseeable future.
Venture is currently producing over 50,000 barrels of oil equivalent per day ('boepd') following a series of successful developments in both its oil and gas operations with the approximate split of production being 45% oil and 55% gas. The Southern North Sea operations are delivering approximately 180 million cubic feet per day of gas of which 60% is being sold at or near spot gas prices.
Commenting on the news, Mike Wagstaff Chief Executive said:
'Hitting record production levels and the important milestone of 50,000 barrels of oil equivalent per day represents a great achievement by the Venture team, including our contractors and partners. This is especially gratifying since it represents a five-fold increase over the production rate at which we entered 2005.'
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