Falklands’ appraisal well confirms extension of oil find described as ‘commercially viable’
Rockhopper Exploration said on Tuesday an oil discovery in Falkland Islands waters extends to the west of the original well, adding to hopes that the oil find is large enough to open up a new province in the remote South Atlantic.
The third appraisal well, 14/10-6 on the Sea Lion feature was drilled 4.1km to the west of the 14/10-2 discovery well to a total depth of 2.706m confirming significant development and hydrocarbon charge.
Down-fluid samples collected were confirmed as oil, according to the official release and, “following this well, the board considers Sea Lion to be commercially viable”.
14/10-6 was the first well to penetrate the Sea Lion main fan to the west of the mapped structural low that runs north-south through Sea Lion. “
The well has been highly successful, proving a thick, high quality reservoir package and a substantial oil column. Wire-line logging operations have been completed. A number of mini DST (down-hole Drill Stem Tests) were carried out within the main fan complex and oil was successfully flowed from the main fan.
The results will now be interpreted and integrated with other wire-line logging data to give an estimate of the potential well productivity, points out the release.
The results of this well are at the upper end of expectations for the Sea Lion main fan complex and we are delighted to see these oil charged sands extending to the west as prognosed. The thickness and quality of reservoir encountered in the lower fan complex gives additional potential updip said Chief Executive Sam Moody in a statement on Tuesday.
However Rockhopper said it did not plan to test the flow of oil in the third appraisal well which will now be plugged and abandoned.
Upon completion of operations on 14/10-6 the Rockhopper intends to drill an exploration well 3.3km to the North West of the discovery well 14/10-2, outside of the Sea Lion Discovery Area.
The well is designed to investigate the presence of reservoir and hydrocarbon charge towards the northernmost currently mapped extent of the Sea Lion Main fan.
Rockhopper is one of a number of explorers drilling in waters off the coast of the Falkland Islands over which Argentina claims sovereignty but tests have yet to establish whether there are sufficient quantities of viable oil to justify investing in infrastructure.
Two of the Rockhopper's earlier appraisal wells have been successful with the flow rates achieved being viewed as commercially viable, according to the company.
This a highly encouraging result helping firm up the commercial viability of the discovery and increasing mid-range resource estimates for the field, said Oriel Securities analyst Richard Rose.
Although not yet disclosed we believe this result is likely to push recoverable reserves into the range of 200-250 million barrels.
Shares in Rockhopper, which have fallen 39 percent in the last month, closed at 141 pence, valuing the company at 418.9 million pounds ($683 million).