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Why is there a belief that there will now be a requirement for “extra” “expensive” wells prior to adding any future producing horizontal wells.
You can likely achieve the OGA’s data acquisition requirements by first drilling a near vertical pilot hole leg, then plugging back and side tracking a horizontal leg from the same well bore.
They have done it before, and the OGA were call with that, so no credible reason for them not to be happy were the same to be done again.
And yes, there would be additional cost to do this, but it would not be significantly “expensive”, as it would be done in continuation, using the same mother bore, and not require the rig to be moved, so the incremental cost to achieve the OGA’s required data would be peanuts in relation to the well costs, and I would anticipate sub 20%, perhaps nearer 10-15%.
It is not likely that these will be wells that require drilled just to obtain data for the OGA, it is likely the mother bores would be utilised to become future horizontal producers.
IMHO
joe
yes the good news was that the licences are extended.just as well or no doubt somebody would be posting "doubts" over whether it would be renewed or not.
Whirlwind - was listed as suspended in the prsentations and appeared as concept studies in CMD presentation. I suspect the OGA said use it or lose it - and hurricane after studying it decided it was not worth it. nothing wrong with that. I think many of us are happy they are concentrating on maximising oil production from what is working better than expected
it doesn't say the OGA did not approve horizontal wells on GWA. If you read the RNS it advises their plans with regard to lincoln and as a consequence the company have no plans on GWA. The results at warwick were very disappointing and that surely is no surprise. As soon as the flow rates wwere announced the market saw that as a non goer. hence the drop in SP.
As i read it they are still planning on the lincoln tieback happening next year and are expecting confirmation next quarter - the rns is just giving all possible outcomes. I guess people read it how they want.
As far as Hurricane is concerned Lancaster is very much a goer on that RNS.
..may not be what it seems.
Kerching. Nice 10% there on Friday. Seems several took it as the price tailed of into the close.
WWTBOFTW.?.
Aided and abetted by the usual 'stay strong' posters on here comforting the LTHs, while they sneaked out the back door?
But hey, what to make of the RNS?
Hopefully this is more thought-provoking than some of the dross on here and Advfn.
This was primarily about the Licences. They had to advise on the OGA discussions as Lancaster expired at the end of the month along with the other fields on P1368.
We now have a further extension to Lancaster and Lincoln for 5 years subject to new requirements which will mean abandoning the current published pre-production plan and instead drill full depth inclined assessment wells.
Why has this new requirement been introduced?
We know that all the other fields were carried subject to Lincoln EPS, and also that Strathmore was written down in 2017, but Whirlwind? Wasn't that shown as active with concept studies until end 2020 in the H1 presentation?
Did they expect this outcome prior to the negotiations? Well, no because they booked a rig that they have no use for because OGA won't approve the 3 planned horizontals on GWA, even though permits were being requested.
That's scrapping Petrofac's work, and there may be a rush job to get one on Lancaster instead.
The question then has to be 'Did HUR approach OGA with a radically new plan because the 3-well 2019 GLA had been so bad and they (incl Spirit) couldn't agree to continue in line with the plan?' Or did OGA say 'No way. If you want to extend P1368 you need to do it our way now.'
HUR would have you believe it's the OGA at Whirlwind, but if they have no prospect of drilling it in the near future with all the other commitments then maybe there was no option, even though they have rented it for so long.
(They also have P&A accrual in the Accounts for the suspended well, but no mention if they have to use it.
They have a rig to use though... but will that be outside the surrender date or not?)
But, whatever the results of these new drills it seems the tie-back is delayed (will approval be affected now that Whirlwind is not theirs), as is the de-bottlenecking and therefore FOil.
The "Growth" slide begins to look a bit unlikely now.
These costly extra wells are unlikely to be future producers, so that prep work will still be before production.
This is a very expensive set-back and no compelling evidence that it is a 'goer' anymore.
jimo
joe
Eski
Maybe more like now, anchor handling.
GLA
Is doing well here. Ignore the trolls. Consider the watercut as negated for now and take into account the ramp up in Q1 (that's forgetting other drilling campaigns). We are good.
The only concern is, when/who buys spirit and their intentions, yet If they reinforce their commitment to the project, then no issues here.
What next?