Rockhopper confirms first oil find offshore Falklands with Sea Lion discovery, to test soon

Source: Rockhopper Exploration

Well 14/10-2 on the Sea Lion prospect in the north Falkland Basin was drilled to a depth of 2,744 meters during April and May 2010. Following completion of final logging, the well was suspended for future testing. Rockhopper Exploration intends to test the well at the earliest opportunity during the current campaign and test equipment is currently being mobilized.

The well penetrated what Rockhopper believes is a regional seal between 2,250 meters and 2,374 meters subsea. Based on log analysis, well site evaluation of shows and samples, sidewall cores and wireline formation testing, it appears that all sands encountered beneath this regional seal at the Sea Lion location are charged with oil and no oil water contacts were encountered.

The top oil sand in the Sea Lion well was encountered at 2,374 meters subsea, and the base of the lowest oil sand level was encountered at 2,591 meters subsea. The total vertical oil column is 217 meters (712 feet), with total net pay of 53 meters in seven identified pay zones, the thickest of which is approximately 30 meters gross.
Pressure data suggest the possibility of two separate oil columns, although this will have to be confirmed by a full well test. The main Sea Lion fan has a net pay interval of 34.5 meters. Additional underlying sands have net pay totaling approximately 18 meters. Approximately 16 meters of this lower pay appears to relate to a Sea Lion lower fan, which had been previously recognized, but not included as a primary prospect. A further 2 meters of deeper pay has also been encountered.

The oil down to level of 2,591 meters subsea is 116 meters beneath the lowest mapped point of the Sea Lion fan. The entire Sea Lion fan has an aerial extent of over 45 square kilometers, and there are strong seismic indications of thicker reservoir packages elsewhere in the fan. The oil down to level is significantly lower than the lowest point of the Sea Lion main fan.

Examination of side wall core samples confirms extensive good oil staining and good reservoir characteristics. Logging data are indicative of good quality reservoir, with average porosity of 19% and good permeability.

Samples of oil recovered from the well have now been analyzed in a specialist laboratory. Five samples were analyzed and returned between 26.4 API and 29.2 API. Further analysis will now be carried out.

Management believes that the Sea Lion well has opened a new play fairway in licenses PL032 and PL033. Rockhopper will now re-evaluate technical data in the light of information gained from well 14/10-2 with a view to de-risking the existing inventory of prospects and indentifying new ones.

"Rockhopper has now confirmed the first Contingent Oil Resource in the Falklands,” said Sam Moody, managing director of Rockhopper Exploration. “Our analysis of the data from the Sea Lion well suggests that there is significant potential upside on our acreage and our technical effort will now focus on integrating all of our new knowledge of the basin so we can understand and identify the best prospects for future drilling. Being a 100% holder of this acreage potentially places Rockhopper in a very strong position. We are now looking forward to drilling Ernest and testing Sea Lion.”

“The test of Sea Lion will be a key step on the road to proving commerciality. We believe that, with modern horizontal completions and water injection in sands of the quality encountered, recovery factors significantly above the 15% assumed in the P90 case could be achieved. Furthermore, our recently updated economic model indicates that a stand alone field of 60 mmbbls recoverable could be commercial at oil prices down to US$50 per barrel."

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