Stratic Reviews Global E&P Plans for 2010
Stratic Energy has provide a business update and review of its plans for 2010.
- West Don 2009 gross production 1.89 mmbbls (equivalent to an annualised average of 5,151 bopd, 892 bopd net to Stratic)
- Water injection operational issues resolved, reservoir pressure showing signs of recovery
- Gas lift stability improved
- Tie in to Thistle/Brent pipeline system on schedule for February 2010 completion
- Partnership investigating third production well to accelerate production from southern region of the field
- Crawford field development work continues on track, focusing on reducing costs and FDP submission by mid year 2010
- Planned participation in Bugle North well in Bowmore area, subject to Joint Well Agreement
- Completed drilling operations on Al Tayr 101 in Syria, well plugged and abandoned after unsuccessful testing
- Signed Letter of Intent for farm-out of F Quad acreage offshore Netherlands, to include a possible carried exploration well
- Completion of sale of Italian business on schedule for closing by end of first quarter 2010
- Amended bank facility provides new $10 million short-term line of credit and deferral of scheduled 2009 year end repayments of approximately $25 million, to be repaid out of Italian disposal proceeds
- Change in North Sea strategy and shift towards increased activity in lower cost international areas.
Production from Stratic's West Don field totalled 1.89 million barrels (mmbbls) (gross) for 2009, equivalent to 5,151 barrels of oil per day (bopd) on an annualised basis (892 bopd net to Stratic), ahead of the Company's November guidance of 1.75 million barrels.
Operational stability has improved with the two producing wells responding to gas lift and issues around the water injection process resolved. There are now clear signs of water injection support at the producing wells. Progress towards the changeover from tanker export to a permanent pipeline export route is on track, with the shutdown for the changeover scheduled to commence shortly. The field is expected to be exporting from the Northern Producer, over the Thistle platform and into the Brent pipeline system, by the end of February. This will substantially improve operational uptime and processing plant stability.
Operator Petrofac is planning a drilling campaign on the neighboring Don Southwest field and we expect that a third production well will also be drilled in the southern sector of the West Don field as part of this campaign. Pressure communication across the field has now been successfully demonstrated, which is expected to result in this well accessing incremental reserves as well as accelerating production from the southern area of the West Don field.
The Crawford field continues to progress towards field development plan (FDP) submission and project sanction. Operator Fairfield is focusing on reducing costs of the development, and is investigating the possibility of a long term contract for a jackup unit to conduct both drilling and production operations, as well as assessing the relative benefits of using multilateral completions rather than hydro fracturing for the Triassic development wells. FDP submission is expected by mid year 2010, with the possibility of development activity commencing early in 2011 and first oil later that year.
In the Bowmore license area, discussions are being held with the licensees of the P815 license (the Nexen operated block containing the Bugle discovery) regarding the drilling of a joint well close to the block boundary of the P815 and P1465 licenses. Stratic's participation in this well, which is subject to the satisfactory conclusion of a Joint Well Agreement between the parties, would qualify as the second of the two commitment wells required on license P1465, after the 15/24a-9 Bowmore appraisal well drilled in 2009. This Nexen operated well will target a possible northern extension of the Bugle discovery, and is currently expected to spud during February using the Transocean GSF Arctic IV semisubmersible drilling unit.
In December, in line with license requirements, blocks 16/3d, 210/19a and 210/20a were relinquished. Stratic held a 100% interest in each of these blocks and elected to relinquish the licenses rather than commit to drill within a short timeframe at high equity levels. Stratic expects to reapply in the recently announced 26th UK offshore licensing round for some or all of the relinquished acreage, and is in discussions with potential partners with a view to forming bidding groups.
Following the conclusion of drilling operations on the Al Tayr 101 well in Syria that has been plugged and abandoned, Stratic and its partners are reviewing their position in block 17, which is shortly due to be extended or relinquished. Although no decisions on block 17 have been made, the partnership remains encouraged by the prospectivity identified in Syria and will be evaluating further opportunities in the country over the coming months.
Production in Turkey totaled 5.1 billion cubic feet (bcf) of gas in 2009, an average of 13.9 million cubic feet of gas per day (mmscf/d) (1.6 mmscf/d net to Stratic), in line with Ryder Scott's 2P production estimate. Production remained steady throughout the year on the Ayazli and Akkaya fields, whilst production from the East Ayazli field was intermittent, with short bursts of production corresponding to the addition of incremental perforation intervals. At year end the East Ayazli field was shut-in.
In a short drilling program late in 2009, two exploration wells, West Ayazli and East Akkaya, were drilled by operator TPAO using the Saturn jackup drilling unit. The West Ayazli well drilled to a total depth of 2,545 meters after encountering gas bearing Akcakoca sands between 643 and 763 meters. The uppermost of these sands was found to be pressure depleted, and so connected to the Ayazli field. Sands encountered deeper in the section were found to be less depleted. These gas bearing sands were tested at 10 mmscf/d, and have been completed to allow cross flow from the lower sands into the upper intervals in communication with the Ayazli field. The East Akkaya well was drilled to a total depth of 1,400 meters, and was plugged and abandoned as a dry hole.
Stratic is currently marketing its interests in Turkey with a view to concluding a sale by mid 2010.
In the Netherlands, Stratic has signed a Letter of Intent to farm-out its F Quad acreage. On completion of the farm-out agreement and subject to Ministry approval Stratic will be fully carried through the next phase of exploration activity, including the possibility of drilling an exploration well. Stratic continues to examine alternative development options for its P8 Horizon West development before seeking to bring in one or more farm-in partners.
- EnQuest Commences Drilling at West Don Field (Aug 09)
- EnQuest Increases Reserves in North Sea with Stratic Acquisition (Aug 03)
- Stratic Highlights 1Q10 Financial, Operational Results (May 28)