Member Info for Exploration

GP

There is quite a lot of high-tech seismic work on the Z1/Z2 interval going on in the North Sea. One of main conclusions is that the reflections from the Z1/Z2 interval are discontinuous which corresponds with the field/outcrop observations onshore. Another conclusion is that 'brightening' in the seismic may correspond to higher porosity in Z1/Z2, but there are only a couple of wells to calibrate the rock properties.

I expect Raithlin may have thought about a similar approach.

Seismic analysis & angle stacks - Devil's Hole

https://nsnrl.com/wp-content/uploads/2022-03-02_Zechstein_Porosity_Change_Study.pdf

NSRL prospect flyer - Devil’s Hole Horst

https://nsnrl.com/wp-content/uploads/UK-DHH-Prospect-Flyer-August-2021.pdf

Gaffney Cline CPR

https://nsnrl.com/wp-content/uploads/EL-19-213301-NSNRL-DHH-Resources-Review-FINAL.pdf

GP

You are correct that there is no Cadeby ‘reef’ to be found. The magnesian limestones of Yorkshire have been quarried for decades for building stones and these quarries have been extensively studied and described in the geological literature.

Rather than a ‘reef’ the oldest (Z1) Zechstein carbonates (Cadeby Formation) appear to have been deposited in a complex of near-offshore pools and islands which created areas of partly-exposed oolite shoals and lagoons, perhaps with large local embayments.

This means pre-drill reservoir prediction for the Z1 in this part of Yorkshire is almost impossible because of the wide degree of paleo-environmental variation over-printed by early diagenetic dolomitization.

Sure, ‘cartoon diagrams showing a Cadeby ‘reef’ have been published but are somewhat misleading. They do not take account of more recent field studies of what is known as the Hampole Discontinuity which describes the boundary between the oldest Zechstein rocks and the underlying palaeosurface.

Nonsense Bubble

Maersk Resilient Is still on location for NAM.

FD

Equinor has pretty poor record of ending up on wrong side of commercial deals.

Their top negotiations guy is hopeless. But as civil servant to be expected.

So GBA didn't work for them which let down Jersey.

FD

I think Noel was referring to his lost weekend on his other pointless posts on his other hot stock, Falanx.

Meanwhile, word on the street is of another corporate deal close to and around Deltic’s core area as the upstream herd piles in.

News out in couple of weeks.

Instead of penalising the likes of BP and Shell with windfall taxes, there has to be a better way to manage the ‘energy transition’ from hydrocarbons to renewables without an ‘energy crisis’.

The government often brags about UK’s offshore oil and gas capabilities so why not put these companies to work to find and produce the nation’s gas - just as a government would do with aviation, automotive industries if faced with a war?

Today’s lack of exploration and appraisal drilling in the North Sea is largely due to fragmentation of licence interests operated by a multitude of small companies unable to raise money for drilling. And there are plenty of low risk gas prospects just sitting there with no hope of ever seeing a drill bit unless viewed as a whole. They add up to many TCF.

So why not introduce emergency legislation in a new Petroleum Production Act providing for major companies to explore/develop multi-block, large areas of their choice, and give existing licensees a, say, x% royalty of net profits for them to share out between them.

It’s called ‘forced pooling’ in the USA and works well in mature areas where there is a log-jam of small interests. Small licensees with no hope of drilling themselves are compelled to participate. This approach is what has kept the US L48 so active and profitable despite its maturity. Each state has its own authority to administer the process.

Big companies can do big things, on schedule band on budget. And if it’s paid for with xx% tax relief the nation and consumers benefit in the long run.

I dare say NSTA would create institutional drag - ‘We’ve always done it this way, so why change?’ But that’s the whole point - change around them should encourage adaption to the new energy scenario.

Thanks Geochem, sorry. - yes, they were great geo-scientists and engineers but their CEO lost the plot and really let down the shareholders.

traygam

Yes, Bowen and Cluff were ‘contemporaries’ in the North Sea. Bowen ran Shell’s North Sea and managed to licence the Brent area. Bowen was a keen ornithologist and named Shell’s first North Sea discovery ‘Auk’. Legend that it was to be called ‘A’ UK, as the first British oilfield, until somebody realised that the sixth field would be called ‘F’ UK - but ultimately became ‘Fulmar’.

Meanwhile, Cluff teamed up with Transworld - a Canadian independent - in the 4th Round - to licence Blocks 20/5 and 21/1, based on a single seismic line, which they farmed out to Texaco to pay for the Buchan discovery well in 1974. The field is still producing today, although Cluff sold out to BP some years ago.

Thanks Oil Riches

Rather like Pensacola, Selene is a drilling/completion challenge to see if the Leman sandstone can be made to flow gas at commercial rates.

Well 48/8-2 discovered gas on Selene but the reservoir pore spaces were occluded with calcite, probably from pore waters originating from the overlying Zechstein carbonates.

Only years later did the industry try multi-staged fracking in horizontal wells - pioneered by Shell on Clipper South - to make the Leman Sandstone flow at commercial rates.

Based on fracking results from surrounding fields Selene is probably Deltic’s best prospect with a good chance of early production via the Barque platform to Bacton.

Oil Riches

Changed Strategy? Looking back, Algy Cluff was forced to change tack to just to save the company.

Under the old CNRL banner, Swindells counted the beans and Nunn did a sterling job accumulating a portfolio of near-shore, pioneering UCG licences with the aim of enhancing UK’s domestic gas supply. But, after much lobbying, Nicola Sturgeon banned all onshore exploration, fracking, drilling on her side of the border and almost put CNRL out of business to gain political support for the SNP from Scottish Greens.

With CNRL heading for the rocks, Algy Cluff licensed large areas in the SNS in the 28th Round in 2013/2014. That cost a £200 application fee and work commitment to reprocess 10 km of existing seismic data per licence area according to the Axis CPR. Cheap.

As described in the corporate blurb at the time, Cluff’s idea was to licence gas-prone areas in shallow (jack-up) water, with lots of legacy data, close to infrastructure (pipelines/terminals) and with new plays attractive to farm-in partners. I believe Cluff’s business plan was never to spend a penny of shareholders’ money on drilling - just too risky for a small company.

Cluff’s application in Q41 and Q42 was based on a new idea of largely unexplored petroleum systems with a Lower Carboniferous (Tournasian) source rock responsible for the Breagh ‘wet’ gas condensate field discovered and developed by Sterling Energy. The Tournasian source rocks are oil prone - same as the oil shales in the Edinburgh area which kicked off the Scottish oil industry in the 1850s to make paraffin and also gasoline for Daimler’s new fangled internal combustion engine. But in Q42 the oil had cracked to gas due to deep burial.

Subsequent drilling by competitors in Q42has validated CNRL’s concept with ‘wet’ gas found at Darach, Pegasus West and Andromeda. It follows that ‘wet’ gas and condensate will likely be present at Pensacola whereas ‘dry’ gas will predominate the petroleum phase further east in the ‘Capricorn area’ where Westphalian coals are the source rocks.

If Pensacola works that's good, but it really opens up a completely new, multi-TCF petroleum system based on petroleum geology overlooked by competitors and may start a scramble to licence open areas across Q42 ,43 and 38 in the forthcoming licence round.

FD

We remember it well. Algy Cluff retired just before that raise and it was really Swindells and Co who 'masterminded' it. Cluff himself thought it was not in shareholders best interests t the time to print too much confetti.

Can't see why another raise is needed at the moment unless management is planning more huge bonus payments to drive the gravy train!

https://www.dailysabah.com/turkey/mysterious-noise-from-below-disturbs-turkish-village/news

maaster82

Calm down, dear.

55% Probability of success at Pensacola?

Yes - no doubt about it. The previous three wells on the licence, and in the immediate area have all found gas.

In fact, not to find gas would be a huge achievement!

But the real risk is whether the zechstein reservoir will flow. Previous wells have established porosities around 7% and virtually impermeable matrix.

The big secret is ‘what is Deltic/Shell doing differently to demonstrate the Zechstein reservoir will flow at commercial rates?’ It’s certainly not pre-drill 100% probability and more likely ~25% or less.

We know the underlying Carboniferous is gas bearing, but tight. What chance it would respond to fracking now widely used in this part of North Sea?

Ceasar

It's ~70%. 27% held by Spencer's and Snelling's institutions. Rest is via nominee accounts representing PIs who've been invested since the Cluff days pre-2014 28th Round entry into North Sea.

FD

Well, someone has to drive the Gravy Train i.e. a job where one makes an excessive amount of money without expending much or any effort.

At the moment, the Deltic management Gravy Train is running smoothly and on time, but it only requires Tullow to alter the points into a siding which ends in the buffers.

Ironic, in a way, that they chose the re-branded ‘Deltic’ name from a powerful British Rail locomotive!

But just needs Tullow's Fat Controller Dhir to put a big red line, Beeching style, though all discretionary spending (i.e. North Sea) - which always happens when tidying up after company mergers.

block 22/17a - see link below

https://fdocuments.net/document/final-relinquishment-report-licence-p1800-ukcs-relinquishment-report-licence.html?page=19

Sjm321

You are right - all we can do is watch and wait to see how the Capricorn/Tullow ‘merger’ pans out now that the all-share deal is done. But, really it’s a takeover of Capricorn by Tullow.

Capricorn’s CEO, Simon Thompson, is leaving and the combined group will be run by Tullow’s boss, Rahul Dhir. Dhir originally worked for Cairn India in the early days, so there is a connection. He was appointed to sort out the financial mess created by the previous Tullow board who have left the company.

Simon Thompson was also ‘champion’ of Cairn’s entry into the North Sea following a decade of failed, high-risk frontier exploration elsewhere seeking to replicate the India success story.

Looking at the press, the writing is on the wall for Cairn’s presence in Scotland with operations expected to become centralised in Tullow’s Chiswick HQ.

https://balteenews.arishluxurysuites.com/capricorn-energy-and-tullow-oil-merger-scotland-to-lose-key-oil-company-head-office-and-jobs/

I doubt Tullow is much interested in UK energy security and Rahul Dhir is smart enough to leave it to established North Sea operators in such a mature province. Besides, Tullow is only committed to seismic and subsurface work up to a drilling decision, so they can easily walk away - but for strategic reasons - irrespective of the prospects.

If Tullow does decide the Deltic properties are non-strategic, at least Deltic has banked some 3D seismic and there will be no shortage of companies wanting to take Tullow’s place. So Swindells/Nunn may have their work cut out in the next 12 months. All good stuff for Deltic.

Sjm321

I suspect Tullow will not be very interested in Deltic's projects which really do not fit their Pan African strategy. Capricorn's North Sea staff are probably wondering about how the looming 'economies of scale' proposed by Tullow will affect their jobs in coming weeks and months.

1) Buy 30,000 BP shares
2) Use dividends to pay gas and power bills
3) You've still got 30,000 BP shares

OilRiches

Agree completely on the tax break - thanks Rishi!

You could be right about Plymouth, although I’ll be interested to see how Capricorn manage to acquire 3D seismic with the Greyke Wind Farms in the area. Cluff were awarded more licences in that area but turned them down when wind farm licence owners trumped oil and gas 8 years ago. Two government departments were doling out licences without talking to each other - not for the first time.

‘Reef’ prospects in UKCS have largely failed in the past because reservoir properties can change horizontally over a few tens of metres. And the ‘big one’ - Ossian/Darach in Block 42/4 found gas and ‘oil’ (which was retrograde condensate), tested at high rates, but turned into water in a couple of days. It remains un-appraised after 3 years..

But Deltic’s best prospect in that area is ‘Richmond’ which represents the pinch out of the Leman Sandstone - analogous to the same gas-bearing play developed in the nearby Cygnus field. That’s why Cluff applied for the Blocks in the first place.

https://www.delticenergy.com/wp-content/uploads/2020/12/Deltic-Presentation-PROSPEX-2020.pdf