2 May 2019
Predator Oil & Gas Holdings Plc
("Predator" or the "Company" and together with its subsidiaries "the Group")
Licensing Option 16/30 offshore Ireland Technical Update ("Ram Head")
Competent Person's Report ("CPR") Prospective Resources Audit
by SLR Consulting (Ireland) Ltd
Highlights
· CONCEPTUAL RAM HEAD P50 GAS FIELD DEVELOPMENT IS FEASIBLE WITH MINIMUM OF 10 WELLS TO BE COMPLETED IN 3 GAS ZONES
· POTENTIAL ULTIMATE TECHNICAL GAS RECOVERY BY DEPLETION DRIVE OF 96%, REPRESENTING 1.773 TCF OF GROSS RESOURCES
· INITIAL PRODUCTION PLATEAU ESTIMATED AT 400 MM CFGPD
· DEVELOPMENT OPTIONS INCLUDE 40KM 24" PIPELINE TO END OF EXISTING KINSALE FIELD PIPELINE OR 75KM 20" PIPELINE TO EXISTING INCH ONSHORE TERMINAL
· TECHNICALLY FEASIBLE TO RE-ENTER 49/19-1 MARATHON GAS DISCOVERY
AT AN ESTIMATED TOTAL COST OF $20.2 MILLION TO FLOW TEST 3 GAS ZONES
· STRONG INDIGENOUS MARKET FOR GAS
Predator Oil & Gas Holdings Plc (PRD), the Jersey-based Oil and Gas Company, with a portfolio of upstream gas assets adjacent to European gas infrastructure entry points, is pleased to provide a Prospective Resources update and Conceptual Gas Field Development Plan for Ram Head in Licensing Option 16/30, offshore Ireland.
Licensing Option 16/30 is operated by Predator Oil and Gas Ventures Ltd. (POGVL 50%), a wholly-owned Predator Oil & Gas Holdings Plc subsidiary, on behalf of its partner Theseus Ltd. ("Theseus" 50%).
Reservoir Deliverability and Impact on Resource Estimates
Wireline neutron-density logs show a gas effect over a gross Middle and Upper Jurassic interval of 270 feet in discovery well 49/19-1, drilled by Marathon in 1984/5, with about 80 feet of potentially productive sand. The potential gross gas column could reach 400 feet. This was not tested at the time in 1984 because there was no commercial incentive for Marathon. Marathon's Kinsale Gas Field fully catered for the Irish gas demand and there was no interconnectors with the UK for export.
NuTech detailed petrophysical evaluation of these gas reservoirs using "Shale Vision" and "Thin Bed Vision Analysis with Fracture Intensity Vision" software highlighted missed reservoir "sweet spots" with average permeability of 56 mD and capable of producing hydrocarbons at good rates.
Independently Esso well 49/14-3 (28 kms to the northeast) provides reservoir quality information from core data for the Middle to Upper Jurassic sands at a burial depth similar to 49/19-1 (Ram Head). Sands with gas shows in this well have porosities up to 13% at 11,300 feet. The reservoir quality observed in 49/14-3 is consistent with the NuTech log analysis results from 49/19-1.Comparison with 49/14-3 also shows that around 150 feet of potential gross reservoir section is faulted out in 49/19-1.
The previously reported range of gas initially in place ("GIIP") for these Jurassic reservoirs in the 140 km² Ram Head Marathon gas discovery are as follows:
|
Low Estimate |
Best Estimate |
High Estimate |
GIIP 100% Gross |
392.6 BCF |
1,451.0 BCF |
3,653.2 BCF |
GIIP 50% Net |
196.3 BCF |
725.5 BCF |
1,826.6 BCF |
Conceptual Ram Head P50 Gas Field Development
The independently validated new reservoir quality information facilitated the commissioning of a Conceptual Ram Head P50 Gas Field Development Study. The data allowed an assessment to be made of reservoir performance, gas well hydraulic performance, and hydraulics of the pipeline to the nearest platform together with potential gas compression requirements. This exercise had never been previously attempted due to insufficient information and a lack of analysis of reservoir quality using new technology.
The study shows that the Ram Head gas discovery can be developed with a minimum number of 10 vertical wells completed in 3 gas zones. It is expected that the gas will most likely be produced by a depletion drive mechanism with an Ultimate Technical Gas Recovery of 96% based on a gross GIIP volume of 1,834 BCF.
The initial plateau gas production rate by 10 production wells is estimated to be 400 mm cfgpd. The study also shows that the reservoir pressure is sufficient to deliver gas to the Kinsale platform at 35 psia and hence gas compression will not be required.
Conceptual 49/19-1 Well Re-entry Feasibility Study
A separate independent study to assess the technical feasibility, cost and risks associated with re-entering and separately testing 3 gas-bearing zones in the Middle and Upper Jurassic in the 49/19-1 well has shown that it is technically feasible. The total cost is estimated to be $20.2 mm. The re-entry and testing of the 49/19-1 well achieves the same objective as a new appraisal well, namely better definition of expected flow rates and therefore resources; the potential for depletion; and of the potential for reservoir compartmentalization.
Kinsale Gas Field Decommissioning
Decommissioning plans for the Kinsale platform, owned and operated by PSE Kinsale Energy are well underway and under the current scenario, all offshore facilities will be removed, and the Inch terminal returned to agricultural use. However it is expected that the application will seek that the 55km 24" offshore pipeline that connects the Kinsale field to shore may be left in situ.
Conceptual Development Scenario
It is currently envisaged that the 10 development wells would be tied by 4" flow lines to a subsea manifold, which in turn would be connected by a 40km 24" pipeline either to the end of the existing offshore Kinsale pipeline, or to a new 75km 20" pipeline that could be laid directly to the current landfall of the Kinsale pipeline at Inch. This latter case is considered to be the preferred development option as it would minimise the length of umbilical needed to power and control the subsea wells. At this time reservoir pressures are considered to be high enough to preclude the need for offshore compression.
Both the above development scenarios require the Inch Terminal to be retained for future use and not decommissioned. At this time, one half of the Inch Terminal is owned by PSE Kinsale Energy (owned by PETRONAS) and one half by Gas Networks Ireland (owned by Ervia). Discussions on the future of the Inch Terminal have been held with some of the relevant parties.
Irish Gas Market
In the median demand scenario annual Republic of Ireland gas demand is expected to grow by 23.7% between 2017/18 and 2026/27 with growth of 6.7% and 36.8% forecast in the low and high demand scenarios respectively over the same period (Gas Networks Ireland 2018).
By 2026/27 Corrib gas supply will have declined to less than one third of initial peak production levels. Energy Security of Supply as Corrib production declines in the medium term will continue to depend upon the Moffat entry point if new sources of indigenous gas are not discovered, developed and brought on production.
In summary there is a strong indigenous market for gas with the potential to export to the United Kingdom in the event of surplus supplies if large discoveries are made and developed.
The International Energy Agency ("IEA") recommends, in its 2019 review of Ireland's Energy Policy that the Irish government should continue to promote exploration opportunities while ensuring that these opportunities lead to successful production.
Purbeck Oil Resources
The previously reported range of the oil resource for the Purbeck reservoirs in the 123 km² Ram Head Marathon 49/19-1 structure are as follows:
|
Low Estimate |
Best Estimate |
High Estimate |
100% Gross |
64 MMbls |
189 MMbls |
493 MMbls |
50% Net |
32 MMbls |
95 MMbls |
247 MMbls |
The Purbeck Oil resource at Ram Head is considered to be a Contingent Resource based on the view that the poor result of DST 2 in 49/19-1 was due to formation damage caused by high mud weight required to balance formation overpressure whilst drilling the well. The resource is still under evaluation and requires significant further appraisal to clarify the potential for development. A 49/19-1 well re-entry to test the deeper gas also creates an opportunity for an extended flow test of the Purbeck oil reservoirs.
Paul Griffiths, Chief Executive of Predator, commented:
"The independent Competent Person's Report represents a significant milestone in demonstrating for the first time the potential for the Jurassic gas reservoirs present in the 49/19-1 discovery well to be able to deliver gas flows at significant rates. The next step is to confirm the actual well deliverability through a re-entry of the well and to conduct tests over 3 gas zones to address the vertical and lateral connectivity of the reservoirs. Whilst no-one underestimates the significant technical, commercial, environmental and regulatory challenges that lie ahead, the confirmation of the potential size of the gas resource combined with a simple and clear development concept serve to further illustrate why Ram Head is currently Ireland's largest undeveloped gas resource. As such it warrants further evaluation combined with an intensified effort to attract drilling partners for a re-entry of the well, subject to regulatory approvals and consents. This is a cost effective and novel method of assessing the development potential of Ram Head without requiring a new appraisal well to be drilled."
This announcement contains inside information for the purposes of Article 7 of the Regulation (EU) No 596/2014 on market abuse
Enquiries:
Predator Oil & Gas Holdings Plc Paul Griffiths, Chief Executive Officer Sarah Cope, Non-Executive Chairman |
Tel: +44 (0) 1534 834 600 |
Novum Securities Limited Broker Jon Belliss |
Tel: +44(0) 207 399 9425 |
Notes to Editors:
Notes to Editors:
Predator is an oil and gas exploration company with the objective of participating with FRAM Exploration Trinidad Ltd. in further developing the remaining oil reserves in the producing Inniss Trinity oil field onshore Trinidad, primarily through the application of C02 EOR technology. Potential for cash flow exists by executing a Pilot Enhanced Oil Recovery project using locally-sourced carbon dioxide for injection into the oil reservoirs ("C02 EOR"). Near-term expansion and growth potential is focussed on upscaling the C02 EOR operations in the Inniss-Trinity oil field and potential acquisitions of assets suitable for C02 EOR development, subject to all necessary approvals.
In addition, Predator also owns and operates exploration and appraisal assets in current licensing options offshore Ireland, for which Successor Authorisations have been applied for, adjoining Shell's Corrib gas field in the Slyne Basin on the Atlantic Margin and east of the Kinsale gas field and Barryroe oil field in the Celtic Sea.
Predator is operator of the Guercif Petroleum Agreement onshore Morocco which is initially prospective for Tertiary gas in prospects less than 10 kilometres from the Maghreb gas pipeline.
The Company has a highly experienced management team with a proven track record in the oil and gas industry.
