MercoPress. South Atlantic News Agency

Falklands' reveals oil at the Isobel/Elaine project and several adjoining fans

The new well has confirmed Isobel Deep as a discovery and it also hit additional oil bearing fans within the Isobel/Elaine complex

Rockhopper Exploration and Falkland Oil and Gas Ltd have confirmed a significant oil discovery at the Isobel/Elaine project to the north of the Falkland Islands. According to a release from the companies the new 14/20-2 well was a ‘re-drill’ of the prior Isobel Deep well which had to be abandoned prematurely due to operational issues despite encountering oil.

 Now, the new well has confirmed Isobel Deep as a discovery and it also hit additional oil bearing fans within the Isobel/Elaine complex although the others were at the edges of the formations.

A total of five oil bearing fans were encountered in the well. It is anticipated that for the additional fans, better quality reservoirs can be found within the main bodies. Net pay for the Isobel Deep, Isobel and Emily reservoirs amounted to 27 meters.

The well is located on licence PL004a in which Rockhopper has a 24% working interest which will increase to 64% following completion of the merger with FOGL, anticipated to occur on the 18 January 2016.

The well successfully re-drilled reached a total depth of 3014m below sea level, in a location some 4km from the Isobel Deep discovery well. The location of the well was also in a position that intercepted the edges of a number of additional fans within the Isobel / Elaine complex.

Additionally, whilst sand with oil shows was recorded in the Elaine South and Irene fans, reservoir quality was low (as had been anticipated) given the nature of the location at the very edge of the fan bodies. Rockhopper anticipates that better reservoir can be found in the main bodies of those fans.

The release adds that the well did not encounter any gas nor did it penetrate an Oil Water Contact within any of the sands in this location, where the Isobel Deep reservoir is 350m downdip from the discovery well. The results indicate that the total oil column established by this second well is likely to be in excess of 480m.

Whilst the data acquired is still to be fully evaluated and integrated, the initial view of the Company is that the results of this Well indicate that the Isobel / Elaine complex is highly likely to contain a commercially viable quantity of recoverable oil.

The well will now be plugged and abandoned as planned before moving to the final well of the program, Chatham.

Samuel Moody, CEO of Rockhopper Exploration, commented:

“Proving oil this far down dip in the Isobel Deep reservoir, in addition to confirming oil bearing sands at a location so close to the edge of the various other fan bodies, is an outstanding result and hugely increases the likelihood that the Isobel / Elaine complex can become a third phase of development in the North Falkland Basin.

”Having retained the sub-surface lead for exploration once again I would like to congratulate our team on their unparalleled success rate of 10 out of 12 wells in licences PL004 and PL032 which brings us closer to proving this to be the billion barrel basin that we believe it could be.

“The success is of course even more pleasing following the announced merger with Falkland Oil & Gas which will shortly complete seeing our interest in the licence significantly increase to 64%”.

FOGL CEO Tim Bushell said it was an excellent result and completes a highly successful 2015/16 drilling campaign, with 3 out of 4 wells making significant oil discoveries.

“ Such an outcome was considerably beyond our pre-drill expectations. Furthermore, the very positive well results in the North Falkland Basin underlines the importance of our decision to acquire Desire Petroleum in 2013 and diversify our exploration risk.

“The merger with Rockhopper is now the natural next step for the Company and should see the realization of shareholder value via the progression of Sea Lion to first oil, the development of surrounding oil discoveries including Isobel/Elaine and further exploration of a number of material untested prospects.

“I look forward to progressing the commercialization of hydrocarbons in the Falkland Islands through my position on the Board of Rockhopper and I would like to take this opportunity to thank FOGL staff for all their hard work over the years in getting the business to where it is today and I would also like to thank our shareholders for all their support since we came to the market in 2004”.