RE: Average down?1 May 2020 14:34
from March annual report-The year began with the completion of a 7 day well test on the Balcombe 2-Z well. As reported at the time (see announcement of 2 October 2018), the test utilised Nitrogen and coiled tubing to clean and prime the well which when removed allowed a brief natural flow at 853 bopd equivalent, not including 22.5% water.
A second flow period was undertaken with the well flowing naturally at 1,587 bopd equivalent, not including 6.6% water. The Balcombe-2z well produces from a single Micrite Layer, just one of the Kimmeridge Micrite Layers. During the initial flow period, the well slugged at up to 3,000 barrels of oil per day which had to be reduced as it exceeded separator operating capacity. Duration of the test runs were limited. However, significant amounts of water continued to be produced dominating production.
The presence of this water was unexpected and was initially thought to arise from fractured communication with other water bearing reservoirs. Subsequent post-test analysis of the recovered water demonstrated levels of salinity significantly higher than any regional trend, and corresponding with the salinity of brine used as drilling fluid from the section indicating a strong probability that brine lost to the formation during drilling rather than formation water was being produced from the site's Micrite Layers. Subsequent detailed analysis of drilling records showed evidence of significant brine losses including volumes not recovered during the testing.
Given the mandated length of the short testing sequence, the Company was not able to remove what it now believes is a limited amount of unrecovered brine from the drilling of the well. It had been hoped that the Company might be able to remove the brine drilling fluid losses, under an extension to the existing planning permission but it transpired that this was not possible and a new application needed to be sought.
As a consequence, the Group has submitted a further planning application split into two stages. Stage 1 will be to remove the lost drilling fluids. Should the results of stage one indicate that we have been successful in recovering the lost drilling brine then, Stage 2 will commence with the installation of long-term environmental protection measures and a full 3 year well test with production periods interspersed with shut in periods in order to garner a comprehensive understanding of the extent and pressure dynamics of the reservoir.
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