Tuesday, January 29th 2013 - 03:42 UTC

South Falklands gas condensate discovery in ‘technically and commercially viable”

Hydrocarbons exploration company Borders and Southern Petroleum announced on Monday that the development of its gas condensate discovery in the Falkland Islands is commercially viable. B&S made its Darwin (East-West) discovery in April and has been carrying out tests to determine the nature of its find.

Borders & Southern is looking for a partner to develop Darwin discovery

CEO Obee, B&S rapidly moving to a new phase of appraisal and new discoveries

Initial studies showed that developing the discovery of the condensate, a liquid form of gas that trades at a premium to natural gas, was both technically and commercially feasible, the company said on Monday, boosting its shares by 12.5% to 27.37 pence in early trading.

More drilling needs to be done before it will be able to proceed with any project, B&S said, adding that development will cost between 1.6 billion and 3.8 billion dollars.

Any development by Borders would represent the islands' second hydrocarbon project.

B&S estimates the size of its discovery at 190 million barrels. The company said it was seeking a partner prior to the next drilling period and has opened a data room for interested parties.

“We believe that the study confirms our view that Darwin is a commercial standalone development, viable with existing technology. In our view, Darwin will attract significant industry interest,” Numis analyst Sanjeev Bahl said.

For an oil or gas development in the remote Falkland Islands in the South Atlantic to make economic sense, large quantities need to be discovered. The company said the next step is to prove the extent of recoverable volumes with appraisal drilling and to confirm the predicted flow rates with a well test.

A 1.6 billion-plus dollars project for a company with a market capitalisation of about 130 million pounds (205.million dollars) is likely to need to be developed alongside a partner.

The appraisal drilling is seen as relatively low-risk, B&S said, and it is already looking to hire a drilling rig.

B&S operates and has a 100% interest in three Production Licences in the South Falkland Basin covering an area of nearly 10.000 square kilometres. The Company has acquired 2.862 km of 2D seismic, 1.492 square kilometres of 3D seismic and drilled two exploration wells making a gas condensate discovery with its first well.

B&S said that in the fourth quarter it commissioned E & P, part of the ThyssenKrupp Group, to undertake a screening feasibility study. The objectives were to determine if the development of Darwin East and West would be technically viable and to provide some high level cost estimates for an economic model. The conclusion of the study was that Darwin East and Darwin West are technically viable as stand alone developments, phased developments or combined in parallel development. Despite a relatively harsh environment and lack of local infrastructure, there is sufficient confidence in current proven technology to develop the discovery.

The study concluded that the most likely development option would be sub-sea wells tied back to an FPSO for processing and storage of the condensate whilst re-injecting gas back into the reservoir to maximise liquids recovery. The integral storage offered by an FPSO allows condensate to be offloaded to shuttle tankers for export. It has been estimated that a development of this type would take three years from project sanction to first production.

B&S Chief Executive Howard Obee said he was delighted with the Company's progress to date and extremely grateful to all those that have contributed to success.

“We have a portfolio containing a very attractive discovery along with an exploration prospect inventory of quality and depth. The Company is now moving into an exciting new phase, as we look to appraise the discovery and add to the discovered resources through further exploration”. 

Oil found to the north of the Falklands by Rockhopper Exploration is due to start pumping in four years time as part of a 1 billion dollars partnership between the company and Premier Oil.
 

21 comments Feed

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1 Xect (#) Jan 29th, 2013 - 08:22 am Report abuse
Now where is 'el think' when you need him?

Anyways, more good news for the people of the Falkland islands.
2 falklandlad (#) Jan 29th, 2013 - 09:17 am Report abuse
Xect,
El Think tends to be v. dismissive of these matters, unfortunately. This is but yet another very positive notice from a company rapidly moving forward with a focused strategic agenda to deliver another exploitable discovery for the Falklands economy. Really, really, good news, save for our difficult neighbours.
3 lsolde (#) Jan 29th, 2013 - 10:12 am Report abuse
Aren't you happy for us, Think?
After all, we ARE neighbours!
4 Anbar (#) Jan 29th, 2013 - 10:31 am Report abuse
Seems rather couched in VERY careful words... i'd tend to agree with el thinko on this one: half-hearted announcement aimed at preventing stock dropping, rather than a flush of success.
5 LEPRecon (#) Jan 29th, 2013 - 10:35 am Report abuse
@3 Isolde

Think isn't paid by La Campora to be happy, or to actually think for himself.

This is good news for the Falklands and the people who live there.

If I was in the Falkland Islands Government, I'd be tempted to buy every household on the Islands a Rolls Royce out of the revenue they'll receive.

Imagine how all the Argentine's would gripe over that! LOL

Of course, you wouldn't necessarily have to drive them, just stand next to them polishing them up, especially when any Argentine visits the Islands.

In reality, though, the Falkland Islands Government will use the revenue to make the lives of the people of the Falklands better. Improved infrastructre, especially the roads. Improved housing, improved schools, and an improved medical facility.

They will show their neighbours how a government is supposed to work for the people, and not for themselves.

As the Falklands prosperity grows, Argentina's seems to shrink, despite having huge amounts of natural resources.

It shows the scale of bad goverance that Argentina is getting poorer despite all of the potential wealth, while their neighbours; whether the Falklands, Chile, Uruguay and Brazil; seem to be getting richer.

Perhaps there is a lesson to be learned there, but the Argentine people seem too arrogant to realise that all their troubles are of their own making.
6 M_of_FI (#) Jan 29th, 2013 - 11:20 am Report abuse
@Xect

If it is not another nail in the Falkland's coffin, you want hear from Think. He will hide until the good news passes. Or if he does sum up the courage to rear his big head, he will just quote share prices and call everyone a turnip. You have to love the 'intellectual' Malvinistas!
7 yankeeboy (#) Jan 29th, 2013 - 12:03 pm Report abuse
If they are investing U$1.6B this must be a huge discovery! Gosh in 3-5 yrs the Falklands are going to be like Brunei!

Poor Argentina looking on with envy, jealousy and hate. It looks like the SOY and CORN is withering in the fields again this year. If they don't get a nice light rain in the next 2 weeks they may will have some serious problems on their hands.
8 Simon68 (#) Jan 29th, 2013 - 12:28 pm Report abuse
4 Anbar (#)
Jan 29th, 2013 - 10:31 am

“... half-hearted announcement aimed at preventing stock dropping, rather than a flush of success.”

As their shares increased in value by 12.5% to 27.37 pence, I would say that they had no fear of their stock dropping!!!!!!
9 reality check (#) Jan 29th, 2013 - 12:42 pm Report abuse
This is so bloody stupid, if the Argentine Government had not been so bloody minded over this whole issue and let good old fashioned sense, instead of pathetic nationalism cloud their judgment, Argentina would probably be sharing in some of the islands good fortune. It's no use denying the existence of the oil and gas or wishing it away. The fact is that within the not to distant future, it will be coming ashore on the island and they will have, through stupidy, cut their nose off to spite their face, yet again.
10 briton (#) Jan 29th, 2013 - 01:46 pm Report abuse
The newspapers today state two British companies are down there,

And reports of CFK screaming of her hatred of the clever brits , are all over the place,

And now the Falklands are getting nearer and nearer to the referendum,
And their is nothing CFK can do about it.

And it hurts, .lol.
11 Trunce (#) Jan 29th, 2013 - 01:59 pm Report abuse
@5

“It shows the scale of bad goverance that Argentina is getting poorer despite all of the potential wealth”

The Open Budget Survey for 2012 has just been published measuring government openess and transparency. Confirms your point.

clip2net.com/s/2LfaH

survey.internationalbudget.org/
12 Beef (#) Jan 29th, 2013 - 06:39 pm Report abuse
Two points make me a very happy investor.

This condensate is very close to ultra-light crude. This is the oil that dreams are made off. With further exploration it is very likely we will find some light stuff in the acreage. This stuff is beautifully cheap to refine compared to that heavy crap in Venezuela.

Data room being opened!!! More than one potential partner has therefore already shown interest. Why waste the money with a data room if not!!

Borders will have huge finds in their licences. Borders already said that drilling would still be on-going in 40 yrs time :)

Argies - Why did you lot cut yourself out of a potential deal? Your loss!
13 XAVIERV (#) Jan 29th, 2013 - 11:08 pm Report abuse
Congratulations .. It will be filled with money .. That's great! Too bad that after March 11 must travel to Africa to leave their ghetto .. je
14 redpoll (#) Jan 30th, 2013 - 01:04 am Report abuse
What the hell are you talking about Javie?
15 andy65 (#) Jan 30th, 2013 - 02:00 am Report abuse
@XAVIERV ,Talking shit as usual?? mmmm smell that sweet oil baby
16 Think (#) Jan 30th, 2013 - 06:22 pm Report abuse
PUMP, PUMP, PUMP….. DUUUUUUMP

And there they go again……, down 3,57% today....., my beloved BS shares after all that BS about ”Commerciality”…

PUMP, PUMP….. DUUUUUUMP

I say “my beloved BS shares” because I am a BS shareholder you know, thanks to my respected foe, Mr. DoveoverDover…..

PUMP….. DUUUUUUMP

tradingresearchpoint.co.uk/2013/01/29/borders-southern-bor-operations-update-positive-on-the-surface-but-drill-down-to-a-sell/

DUUUUUUMP
17 folk-slum-lands (#) Jan 30th, 2013 - 07:28 pm Report abuse
uuuuuujajaja...keep dreaming! the 3,ooo islanders needs 189 years to “plan”...
18 redpoll (#) Jan 30th, 2013 - 09:52 pm Report abuse
@17 Nice new name Sussie
19 Anbar (#) Jan 31st, 2013 - 12:24 am Report abuse
got to agree with el think here... even though hes still trying to sell doveroverdover as a real person when everybody knows he was a sock-puppet...and one caught out and totally sussed.

Even so, as i said, carefully couching of phrases to paint a rosy picture, that isnt that rosy unless they hit gold big time on the next drilling.
20 Doveoverdover (#) Jan 31st, 2013 - 07:45 am Report abuse
@19 Repeating yourself again I see, and as sadly wrong as ever. Do you think anyone gives a twopenny fig for your blinkered opinions given your record of dreadfully poor analysis of even the most transparent events? That's rhetorical by the way.
21 row82 (#) Feb 06th, 2013 - 02:44 pm Report abuse
Please support this page - Falklands Forever British - dedicated to Falkland Islands current affairs, keeping the islands free and poking fun at the lunacy of the Argentine government and their various claims and winding up their Internet trolls - www.facebook.com/truthfk

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