UK groups join to re-assess Spaniards/Gamma

Offshore staff

LONDON -- The partners in UK North Sea license P1655 (block 15/21g) have agreed terms for a 70% interest in part of adjoining license P218 (block 15/21a). In exchange, they will fund the cost of a well in P218 to appraise Amerada Hess’ 1989 Spaniards/Gamma oil discovery, and to assign the P218 partners 30% of P1655.

The block 15/21g consortium comprises EnCore Oil, Nautical Petroleum, and Serica Energy. DEO Petroleum operates block 15/21a, in partnership with Faroe Petroleum, Maersk Oil UK, and Atlantic Petroleum.

A follow-up appraisal well could be funded on promoted terms by the current P218 partners, but funding for further wells would be determined by equity share.

Subject to approval from the UK’s Department of Energy and Climate Change, part of the P218 license will be amalgamated into P1655. The first well is expected to spud next spring, subject to rig availability, permitting, and site survey approvals.

EnCore has also agreed to farm into 50% of a license currently held outright by Echo Exploration covering block 15/21d. This includes the 15/21-50 Beehive discovery well, again drilled by Amerada Hess in 1993, and flowing 5,700 b/d of 28º API oil on test.

Alan Booth, CEO of EnCore, said: "Although not without risk, if successfully appraised, Spaniards/Gamma has significant upside potential but also a relatively low commerciality threshold, given both the proximity of the Scott field and the potential for synergies with the prospective development of the nearby Perth field.

“Block 15/21 is a prolific block, containing a number of previously developed fields and having had 56 exploration and appraisal wells drilled in it to date, the last well, 15/21-56, being drilled some 14 years ago. We believe that the time is now right for further evaluation of these undeveloped discoveries.”

07/01/2011



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