Out Foxed: Reports Good for Fox's Bourbon Prospect in N. Sea
Fox Petroleum Inc provides evaluation results for the Bourbon prospect located in the central North Sea. Analysis of the report shows that Fox's 46% stake in the Bourbon prospect could amount to a high estimate of almost 54 million stock tank oil initially in place (STOIIP).
As part of the farm-in agreement, Fox will be working with its joint-venture partners Valiant Petroleum Ltd and Petrofac Energy Developments Ltd to develop the project during 2008. Pursuant to the agreement, Fox agreed to obtain a 46% working interest in the project and as a part of the consideration for the interest, Fox agreed to pay for 89% of an exploration well which is planned to be drilled in 2008.
Valiant Petroleum has contracted the oil services company RPS Energy to do a full analysis of the hydrocarbon bearing and economic potential of the Bourbon prospect as part of a competent persons report on Valiant's entire portfolio. RPS Energy provides technical and operational advice and input on commercial energy projects located around the world, from the start of a project right through the life cycle to completion.
For the Bourbon prospect, STOIIP ranges were independently calculated by RPS Energy and in this case the STOIIPs were used in conjunction with data from the nearby Eider Field to generate a P50 profile and establish likely recovery factors by analogue. Although the Bourbon prospect is deeper than the Eider Field, RPS Energy has commented and Fox concurs that if oil is successfully discovered in the Bourbon prospect, similar positive recovery factors to those found in Eider can be justifiably used in the estimates for the Bourbon prospect.
RPS Energy has risked the Bourbon prospect at 28.1% based on both the likely reservoir presence and quality, together with its proximity to the Eider Field. The principal risk on the Bourbon prospect is structural in terms of whether the horst feature currently interpreted really exists or whether the faults can seal against the general up-to-the-west regional dip that culminates at Eider.
"These results are very encouraging, and provide proof of the potential this property is going to provide to Fox," Fox CEO Richard Moore says of the report. "RPS Energy is a world class oil service company, and to obtain this quality of data reinforces our optimism that this prospect will propel Fox as a dominant player in the North Sea."
"These results are not to be taken lightly, and due to the nature of the report we feel that these estimates are conservative in value, and we are more eager than ever to begin exploration activities on the property to establish proven reserves and progress as an oil production company," Fox Vice President of Finance Alex Craven commented.
Royal Dutch Shell is the most active producer in close proximity to the Bourbon prospect, as it owns and operates many producing fields in the area, including, Eider Field (211/16a & 211/21a), Magnus Field (211/12a), which has a potential reserve of 1.65 billion barrels, Cormorant Production Facility (211/26a), which is the starting point of the Brent pipe system, and the Tern Production Facilities (210/25a). Other companies producing in the area include: BP, Lundin Petroleum AB, Nexen Inc, and ConocoPhillips.
Two major production facilities exist in adjacent blocks, including Eider to the west and Magnus to the North. The existing pipeline and production infrastructure links could be utilized by Fox in the event of a discovery. Eider field has a very similar geological structure as the Bourbon prospect, and is currently producing 1900 barrels of oil per day. The existing pipeline has a total capacity of 50,000 barrels of oil per day representing a vast excess in capacity for production.
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