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Joe, agree with all you've said.
"I had earlier asked what this may look like,but was disappointed that no-one was able to quantify the 'better than expected' scenario, especially given the number expecting it."
Assuming that BOTH a sidetrack and water injector is successful and assuming that AM is extended for another 3 years, I have an estimate of 18m barrels reserves for CPR as best case.
Based on 11k avg 2021, 13k 2022, 14k in 2023 and 2024. (Assuming sidetrack in late 2021, and water injection in spring 2022)
However, with the deferral of sidetrack, and questions about FWP going ahead, I'm unsure if there would be any/much reserves.
The deferral in sidetrack by a year would reduce reserves by maybe 2-3+m barrels (depending on how the bubble point keeps up).
As for resources, I'd be very surprised to see big resource upgrades from the FB of Lincoln or Lancaster than that which was revealed at tech review.
As for sandstones, again I wouldn't expect much. Yes there is oil within the sandstones, but not 100s of mills of barrels.
joe - my expectation is a large resource figure in the sandstone - which will presumably be more of a conventional play than fractured basement
CONTD
At Lancaster, we are left with the Review data and expectations for sandstone fields. But without any further development drills, it will surely remain as 2C.
Some have suggested that the Reserves will be exhausted, but that is not necessarily the case if a greater recovery factor is employed in the calculation, perhaps not unreasonable for sandstone.
However, we know 7z dipped down and is closer to the aquifer and is the suggested reason for the water cut. Well 6 is around 20m higher yet with an increasing water cut, and if this is also coming from the aquifer , it could water out and become economically unviable. We know no more than the water cut is rising and the downhole pressure is falling. Rates are not given.
It is suggested that the oil is coming from the sandstones and could offer an increase in recoverable oil, but no immediate drilling is planned so any new interpretation has to be based on the existing infrastructure. Looking at the U-shaped profile of #6, I am not convinced oil will flow from the [uphill] toe in preference to the water already in the well, which is increasing as extraction continues.
In summary,
Halifax will not have any Reserves and Resources will be downgraded due to adopting normal closure, awaiting development and reduced field area.
Lincoln will be similarly treated, and Warwick no less severe.
Lancaster, could have an increased 2C and Reserves depend on the interpretation proferred by HUR and that accepted by Equipoise for the CPR. The reserves will need to be commercial and include detail of OPEX and the live Bluewater contract otherwise they will also be just Resources.
jimo
joe
Even during Dr T's tenure, HUR had suggested the possibility of needing a shallower well in Lincoln for future development testing, following the catastrophic results of the GWA 3 well exploration programme funded by Spirit Energy, in exchange for 50% of the field(s).
The gung ho spending on the Lincoln tie-back in advance of OGA approval resulted in an amended Agreement with HUR holding all the invoices, and 50% of the laid-up rig charge, money which may have been very useful now, but the activity was necessry to hold the very ambitious timeline for the next year, whilst engaging with the OGA for permission to extract and gas disposal agreement.
I note that there is still an expectation of a better than expected CPR providing an uplift to the SP. I had earlier asked what this may look like,but was disappointed that no-one was able to quantify the 'better than expected' scenario, especially given the number expecting it.
My view is that a better one is unlikely, but wanted to know what I'd overlooked.
HUR website says Halifax - To be updated following completion of ongoing Technical Review and/or updated Competent Person’s Report. We await. Few patiently!
HUR website says 'Warwick/Lincoln - The joint venture undertook a three well drilling program on the GWA during 2019 and is currently evaluating the results.' and 'To be updated following completion of ongoing Technical Review and/or updated Competent Person’s Report.'
Meanwhile Centrica have just said 'The charge also includes a £135m write down of the Greater Warwick Area assets, reflecting significant uncertainty over field development.'
Spirit Energy Resources Limited acquired Spirit Energy WOS Limited for £119,742,000 in 2019, and also disclosed the company had recognised an [unspecified] impairment charge during the year.
Even after adding on-going spend, the current book value must be de minimus, and still a P&A to do.
Will HUR treat their 50% of the asset the same, pending a new appraisal well?
TBC...
Keepwell,
"I wanted a summary of what happened to Lincoln. "
Which has never been properly explained.
I have concluded (although this is absolute pure speculation and guesswork) that it revolves around some sort of personality-clashes, old grudges, and similar idiocy. Back in the day, Hurricane seemingly had a very good rapport with the OGA. But that seems to have gone sour. And it's the OGA which was instrumental in 'blocking' tieback of Lincoln. Quite possibly because some of them didn't like the idea of Spirit's involvement.
Don't expect 'transparency' in regard to all of this. The oil business doesn't work like that. Outwardly 'transparent' in financial and various other matters, very opaque in others. Like the crude it deals in. Some of the nicest people in the world, but who can be utterly ruthless at times, just to 'prove a point'.
It's not impossible that Dr Trice himself (as a still significant shareholder) might not be involved. He's an incredibly clever chap. Not incapable of bombing his own airfield.
I wanted a summary of what happened to Lincoln. This is from February 2020 published in the FT.
Hurricane Energy scraps plan for Lincoln Crestal well production
Hurricane Energy walked away from plans to connect the Lincoln Crestal well for production this year and said it would abandon and plug the well if it failed to get approval to extend the suspension consent.
The 205/26b-14 well, Lincoln Crestal Well, was drilled in the third quarter 2019, and tested at a maximum stable flow rate of 9,800 stb/d, in preparation for production.
Regulatory consent for suspension of the well was granted to allow the company to carry out more tests, and required that the well be plugged and abandoned by 22 June 2020.
But the GWA Partners - comprising Hurricane GWA and Spirit Energy - concluded that it would not be possible to tie-back the Lincoln Crestal Well to the Aoka Mizu FPSO in 2020 and now planned to seek a delay to the abandonment of the well to carry out further testing amid plans for an additional production well.
'A rig contract is being negotiated in order to be able to drill and test a production well on the Lancaster licence (Lancaster -8 Well) during the second or third quarter of 2020,' the company said.
'If the GWA Partners are unable to obtain approval to extend the suspension consent, the Lincoln Crestal Well will be plugged and abandoned by the Paul B Loyd Jr rig in March 2020, prior to the planned start of the Lincoln Commitment Well,' the company said.