MercoPress. South Atlantic News Agency

Desire plugs Ninky well, plans to move to East Flank based on positive 3D

Stephen Phipps Desire chairman: time to review financial options

Falkland Islands Desire Petroleum reported Monday that it had completed the drilling of its Ninky prospect (2.620 metres) which showed the reservoir quality “is generally poor” and therefore the well will be plugged and abandoned, according to an official report released Monday.

However Desire Petroleum states in its release that 3D seismic operations are ongoing in a joint program with Rockhopper and initial indications are good with priority areas identified in the East Flank between Ninky and Sea Lion and over the Ann/Orca South prospect.

A well drilled at Sea Lion by Rockhopper has proved to be commercially viable.

“Desire remains optimistic that existing prospects can be significantly de-risked using the new seismic data and that new prospects will be identified, particularly within the East Flank play which is widely developed within the Desire operated licences”, points out the release.

Processing of the new seismic data collected by the “Polarcus Nadia” is in progress and initial indications are that data quality is good. Priority areas have been identified in the East Flank play between Ninky and Sea Lion, and over the Ann/Orca South prospect. The processed data from these priority areas is expected to be available in July. The full, merged data will be available later in the year, which will provide coverage over the southern part of the East Flank play and the Helen prospect.

Desire estimates that in completion of the Ninky well the company will have funds more that adequate for current activities, “but insufficient to drill new wells”.

“On completion of the Ninky well Desire will have funds of circa $37 million which, while more than adequate for our share of rig and vessel demobilisation, completion of our 3D seismic acquisition, processing and interpretation plus general working capital needs, is insufficient to drill further wells”, said Stephen Phipps Desire chairman.

However given the continuing confidence that oil will be discovered on Desire’s acreage, “further wells will need to be drilled and, therefore, once the results of the Ninky well and the 3D seismic have been analysed, we will review all financing options available with the intention of rejoining the drilling campaign later in the year if possible”.

More specifically on the Ninky prospect, based on drilling and wireline logging, the well encountered two sand-prone sections in the Upper and Middle F2 intervals, which were the primary targets (2323 metres to 2334 metres and 2365 metres to 2389 metres). The sands have a combined gross thickness of 35 metres and oil shows were encountered throughout both intervals while drilling. The reservoir quality is generally poor having only 5.6 metres of net reservoir with an average porosity of 13%. A thin interval of around 1.2 metres at the top of the Middle F2 zone is interpreted to be oil bearing from log analysis.

Wireline formation pressure measurements were attempted, but no valid pressures were obtained, indicating that the reservoirs are low permeability at this location. As a result no wireline sampling was attempted. The depositional model suggests these sands are sourced from the east and therefore better reservoir quality may be expected downdip. In addition, there are indications from seismic of further sands along strike on the Ninky structural high, which were not penetrated in this well. These opportunities will be evaluated with the new 3D seismic as part of Desire’s prospect inventory update.