North Sea Find Could Be Even Bigger After Positive Drilling Results

A large gas discovery in the Dutch North Sea could be even bigger after an exploration drill beat expectations, one of the companies involved said, a shot in the arm to the traditionally gas-rich Netherlands where output has been declining.

The Ruby well, the first drilled in the area about 20 km (12 miles) off the northern Dutch coast since the early 1990s, produced gas at a higher rate than expected thanks to “excellent” geological quality, said John Martin, CEO of Hansa Hydrocarbons, the operator of the field.

The wider license within which the Ruby well is located is estimated to contain about 2 Tcf of gas, more than the Netherlands’ annual gas production.

Martin told Reuters he was “optimistic” this figure could be upgraded following expectation-beating results from Ruby.

“Not only have we proved up a substantial volume but it also confirms the extent of the hitherto poorly understood basal Rotliegend sands in the offshore basin,” he said.

Hansa Hydrocarbons, a London-based exploration company backed by U.S. private-equity firm Avista Capital Partners, is partnering on the project with Dutch oil and gas explorer Oranje-Nassau Energie, which has a 40% stake, and state entity Energie Beheer Nederland, with a 20% stake.

Dutch gas production has been steadily declining, partly due to a lack of new developments and partly to a government-mandated cap on output from the country's largest field at Groningen after it was established that it triggered earth tremors.

Total Makes Foray Into ExxonMobil’s Exploration Hotbed Offshore Guyana

Total has agreed to pay $1 million for an option to buy a 25% stake in an oil exploration block offshore Guyana, its first foray into an area close to where ExxonMobil made one of the largest discoveries of the last decade.

Eco Atlantic Oil & Gas, a small Canadian exploration company that earlier this year listed on London’s junior AIM market, said Total now had the option to acquire the stake in the Orinduik Block for another $12.5 million following the analysis of recently collected 3-D seismic data.

“In the event that the option is exercised by Total, the deal proceeds will recoup all our expenses on the expanded 3-D program and fund us for drilling a minimum of two wells based on current well costs,” said Gil Holzman, president and CEO of Eco Atlantic.

If Total proceeds with the deal, Eco Atlantic’s interest in Orinduik will fall to 15%, while partner Tullow Oil maintains a 60% stake and the block’s operatorship.

Tullow Oil declined to comment and Total was not immediately available for comment.

“It is of course positive to see a company such as Total show interest in this exploration license but the manner of the agreement, as an option, shows a certain degree of to-be-educated geological caution on the part of Total,” analysts at Jefferies said.

The waters offshore Guyana and Suriname have been a hotbed for oil and gas exploration since ExxonMobil made its huge Liza discovery in 2015, part of the Stabroek Block where it estimates lay 2.25 Bbbl to 2.75 Bbbl of oil.

In June, ExxonMobil and its partners gave the go-ahead for the $4.4 billion development of Liza, one of a handful of megaprojects approved at a time when the oil industry remains in cash saving mode.

ONGC Strikes Oil, Gas Offshore West Of Mumbai High

The latest discovery of India’s largest oil explorer, Oil and Natural Gas Corp. (ONGC), to the west of its Mumbai High offshore fields is estimated to hold in-place reserves of about 20 million tonnes, sources with knowledge of the matter said.

The Mumbai High field annually produces oil and natural gas of about 9 million to 10 million tonnes of oil equivalent. The company discovered hydrocarbon reserves west of Mumbai High at well WO 24-3 in July.

ONGC tested nine zones in the well, the two sources with knowledge of the matter told Reuters.

“One zone alone yielded more than 3,000 barrels per day of oil, and there are deeper zones where oil and gas both are encountered,” one of the sources said. “It is a large discovery going by Indian standards and is in a different play than discoveries made in the neighboring Mumbai High fields.”

ONGC informed the Directorate General of Hydrocarbons, the upstream advisory arm of the federal oil ministry, about the latest discovery earlier this month. The company now plans to drill appraisal wells to determine the size of the new find’s recoverable reserves, the sources said.

ONGC is struggling to ramp up its output as most of its production comes from mature fields.

“It is a good discovery and gives ONGC further hope. This has opened up a new area for exploration around Mumbai High,” the second of the sources said.

An ONGC spokesman declined to comment on the potential for the discovery.

ION Extends 2-D Multiclient Program Offshore Panama

ION Geophysical Corp. launched an approximate 50% extension to its offshore Panama program due to strong client interest and prefunding to evaluate offshore Panama in advance of the anticipated license round, the company said on Sept. 28.

The client-driven survey provides a regional framework typical of BasinSPAN programs to evaluate the geology of the Panamanian offshore, while the new extension provides more detailed coverage that allows E&P companies to evaluate blocks ahead of the expected license round.

Recent exploration success offshore Colombia, adjacent to Panama’s Caribbean coast, has created interest among E&P companies in high-quality seismic data to evaluate the hydrocarbon prospect on this margin. The expanded program will be about 9,000 km (5592 miles) and is the only modern data available offshore Panama.

“The program has been progressing well with excellent data quality and solid productivity, due in part to the deployment of our offshore operations management software, Marlin,” said Brian Hanson, ION’s president and CEO. “Marlin enabled us to navigate one of the busiest maritime transit routes in the world near the Panama Canal resulting in a safer and more efficient program.”

Eni Upgrades Resource Potential Offshore Mexico

Eni has increased the estimate of potential resources in place offshore Mexico in the Bay of Campeche after its Miztón-2 well hit 185 m (607 ft) of net oil pay in the Orca Formation, the company said Sept. 26.

Drilled 10 km (6 miles) from the Amoca discovery in a water depth of 33 m (108 ft), the well’s data indicate a single 280-m (919-ft) thick oil column, said Eni, which estimates the oil gravity at between 28°API and 30°API. The well reached a final depth of 3,430 m (11,253 ft).

“An extensive borehole data acquisition together with a fluid and rock sampling campaign was carried out and the well will now be temporarily suspended,” Eni said in the release. “The exploration campaign will continue with the drilling of a well on the Tecoalli discovery.”

Eni now estimates the Miztón Field to have about 350 MMbboe in place.

In other news offshore Mexico, Eni said it is preparing a development plan for Phase 1 of the Amoca Field, where startup is expected in 2019.

The company also said it has signed three E&P licenses for Sureste Basin blocks 7, 10 and 14. The blocks were awarded during the first competitive bid round of Ronda 2. Eni México will serve as operator of the blocks, with 45% interest in Block 7, 100% interest in Block 10 and 60% interest in Block 14.

Joint venture partners in Block 7 are Cairn (30%) and Citla (25%), which also holds a 40% interest in Block 14.

Total, Chevron Form Deepwater GoM Exploration Pact

Two deepwater players are joining hands in the U.S. Gulf of Mexico (GoM) on a mission to capture seven prospects spread across 16 blocks.

Total said that its subsidiary Total E&P USA entered an agreement with Chevron U.S.A. in the deepwater GoM. The targeted prospects are located in what Total described as “two promising plays” in the GoM. They are Wilcox, which is located in central GoM next to the Anchor discovery, and Norphlet in Eastern GoM near the Appomattox discovery, the company said in a news release.

Valentina Kretzschmar, director of corporate analysis for Wood Mackenzie, said “The move is an indication that Total’s appetite for exploration is coming back. Since 2009, Total’s GoM drilling has been operated by Cobalt under their strategic alliance for the basin. This led to the large North Platte discovery in 2012, followed by several dry exploration wells.

“The new Chevron partnership could revitalize Total’s portfolio in the GoM,” Kretzschmar said in a statement.

Total said its participation in the wells, the first of which was spudded in late July on the Mississippi Canyon’s Ballymore prospect, will be between 25% and 40%.

Hyperdynamics Seeks Partner, Two-Year Appraisal Period Offshore Guinea

Hyperdynamics Corp. has notified the government of the Republic of Guinea that it will seek a two-year appraisal period under its oil and gas production-sharing contract (PSC), the company said in a news release.

The Houston-based company also said its partner, South Atlantic Petroleum Ltd. (SAPETRO), will withdraw from the joint operating agreement and the PSC, assigning its 50% interest to Hyperdynamics free of cost.

Hyperdynamics, which will become the 100% interest holder, said it will look for partners.

“Based on further analysis of the results of the recently drilled Fatala-1 exploration well regarding the oil saturation calculation—plus our internal review and the log analysis conducted by eSeis, an independent geophysical and petrophysical consultant—we believe we have made a petroleum discovery that implies the presence of commercially exploitable resources as specifically defined in our production-sharing contract,” Hyperdynamics CEO Ray Leonard said in the release.

On Sept. 15, Hyperdynamics reported the Fatala-1 well did not encounter any oil shows above oil-based mud signature while drilling or from analysis of cuttings, although the company said it identified 5 m (16 ft) of calculated hydrocarbons in the upper Cenomanian channel of the main formation target based on a study of well logs. Drilled in 2,897 m (9,505 ft) of water, Fatala-1 reached a total depth of 5,117 m (16,788 ft) below sea level, the company said.

“We remain committed to seeking to create value for our investors,” Leonard said in the Sept. 21 statement. “While SAPETRO has decided not to continue exploring with us in Guinea, we want the opportunity to appraise the Fatala prospect area to determine whether or not it is commercial.”

—Staff & Reuters Reports

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