RE: Baron Oil: is the next catalyst coming? by Charles Archer November 1, 20232 Nov 2023 09:19
Credit to Charlie London worth a read.
Some key reminders on Chuditch, based on 26 October 2022 webinar:-
Chuditch sat right in middle/heart of an extensive gas fairway. Sunrise, Baya Undan gas etc located in same reservoir system as Chuditch
Quality of reservoir – Net to Gross figure of 89% shows how much of rock is reservoir (very high). Permeability is a key parameter (connectivity of porosity, how gas can move between pores, how gas can be pulled out via well bore). Typically for a gas reservoir you would use a cut off of 1mD, average is 195mD which is very good (in some place up to 1,000 mD, would flow exceptionally well). Expected as Baya Undan has flown exceptionally well. In summary a very good reservoir.
Scale of Gas zone compared to Gherkin – looking at gas column height of about 150 to 160m
Chuditch-1: dome of about 20km, 150m to 160m high for much of zone.
Chuditch NE: not entirely within 3D, extends to 2D mapping. Believe Chuditch-1 fills up with gas, spilled into Chuditch NE, when that fills goes to Sunrise.
Plan to drill Chuditch-1 with six development wells, once starts to deplete bring in Chuditch-NE etc. Hope to achieve 300m cubic feet of gas per day (sales gas) which equates to 2m tonnes per year of LNG production (about 10% of UK import capacity). 1.35 TCF for Chuditch-1 (this was prior to slightly lower ERCE CPR figures) is more than UK offshore produces in a year
Chuditch has unique attributes which facilitate accelerated development: (i) in force PSC, (ii) exclusively in TL waters, (iii) have scale, (iv) in shallow water compared to other TL fields, (v) plan for CCS.
Why did Shell give up asset? Drilled nearly 25 years ago. Not gas market/LNG market across SE Asia 25 years ago. Also targeting oil not gas. No pipeline infrastructure – nowhere to take the gas. 25 years ago gas was not a commercial commodity. 25 years ago was an oil price cash, back then a gas find was a failure. Still a civil war between TL and Indonesia at that time. Sundagas benefiting from prior drill and seismic and 3D data – if doing from scratch today would cost $50m.
Relationship with TL Government? Relations are very good. Advantage of working in a small country – a big fish in a small pond. Very frequent meetings with Government, extremely supportive. Appreciate trying to expedite project. Very focussed on Sunrise, but also very focussed on fact need revenue. Sundagas talk about opportunities to develop Chuditch (show develop scenarios to Government first of all). They see that assets like Chuditch would traditionally have been tied into Sunrise and used to back fill it, but nowadays Chuditch represents an opportunity to develop revenues before Sunrise.
Would you consider an outright sale of BOIL/an asset if price is right? Yes. Don’t want to produce. Outright bid works better for PSCs, buy the company.
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