Last checked at 11 Apr 2023 07:01
11 April 2023
Beacon Energy plc
("Beacon Energy" or the "Company")
Schwarzbach-2 Development Well Drilling Rig Contracted
Beacon Energy (AIM:BCE) is pleased to announce that its wholly-owned subsidiary, Rhein Petroleum GmbH, has contracted a fully-crewed drilling rig from RED Drilling & Services GmbH ("RED Drilling") for the planned Schwarzbach-2 ("SCHB-2") development well within the Erfelden Field, onshore South West Germany.
The rig is expected to mobilise in early-June 2023 targeting a mid-June spud. Drilling operations are expected to take 25 days to reach the prognosed TD drilling depth of 2255m (1709m True Vertical Depth), with an additional 12 days scheduled for testing. The drilling pad has been prepared and the 20" conductor pipe has been set at 85 metres.
It is anticipated that once completed, the SCHB-2 well will be tied-in to existing production facilities at the Schwarzbach site which will take approximately 12 days to complete.
Larry Bottomley, Chief Executive Officer of Beacon Energy, commented:
"I am delighted that we have been able to secure this high quality rig so swiftly after completing our acquisition of Rhein Petroleum and readmission on to AIM. This well is the first of potentially four development wells to be drilled at Erfelden over the next 2 years and is the next step in delivering the self-funding business model created by the acquisition of Rhein Petroleum.
To re-emphasise the highly value accretive nature of the transaction we recently concluded with Rhein Petroleum, the funds we raised to complete the deal will be used to drill SCHB-2 well which represents a material value catalyst for Beacon. In the success case, this well will deliver a step-change in production and cashflow which will enable the Company to fund further value enhancing activity across the portfolio. We look forward to providing further updates on SCHB-2 as we near the spudding of the well in the coming months."
Enquiries:
Beacon Energy plc Larry Bottomley (CEO) / Stewart MacDonald (CFO) | via Buchanan | ||
| |||
Strand Hanson Limited (Financial and Nominated Adviser) Rory Murphy / James Bellman | +44 (0)20 7409 3494 | ||
| |||
Buchanan (Public Relations) Ben Romney / Jon Krinks | +44 (0)20 7466 5000 | ||
|
| ||
Tennyson Securities Limited (Joint Broker) Peter Krens / Ed Haig-Thomas | +44 (0)20 7186 9030 | ||
| |||
Optiva Securities Limited (Joint Broker) Christian Dennis | +44 (0)20 3411 1881 | ||
For further information, please visit www.beaconenergyplc.com and @BeaconEnergyPlc on Twitter
To register for Beacon Energy's email alerts, please complete the following form: https://www.beaconenergyplc.com/media-centre/news/#alerts
About the Erfelden Field
The Erfelden oilfield is the most northern oil field in the Upper Rhine Graben and is comprised of four juxtaposed structural segments: the depleted Kuehkopf segment, the producing Schwarzbach Main segment, the discovered Stockstadt Mitte segment and the unproven Schwarzbach South segment.
The westerly Kuehkopf segment was discovered by Exxon and produced oil between 1956 and 1985, who also operated the adjacent Stockstadt field. Both accumulations were discovered, appraised and developed from the subsurface description from legacy 2D seismic data.
Rhein Petroleum subsequently secured the licence (Operator, 100%) and acquired an extensive 3D seismic survey which led to the discovery of the Schwarzbach Main segment in 2015 when the Schwarzbach-1 well (SCHB-1) discovered oil in the Oligocene Pechelbronner-Schichten (PBS) sandstones in a North-South trending structural high at northern end of the Erfelden Field. The Schwarzbach Main segment is still producing light oil (37-38 API) from the SCHB-1a well through the Schwarzbach Production facility.
The Schwarzbach-2 development well (SCHB-2) is targeting the Stockstadt Mitte segment which was proven by the Stockstadt Mitte-1 well (SK-M1), drilled by Exxon in 1986. This well encountered oil in the PBS sandstones and in the shallower Meletta-Schichten sands (ME). The independent Competent Person's Report published by the Company in December 2022 assigned 2P reserves of 3.784mmbbls to the Stockstadt Mitte segment.
The development plan for the Stockstadt Mitte segment envisages 3 wells - the SCHB-2 production well to be drilled in the next few months and subsequently an additional 2 wells; a producer and a water injector. The aim is that these additional wells will be drilled over the course of the next 18 months funded from the free cash flow generated by production from the SCHB-2 well.
The drill pad has been prepared immediately adjacent to the Schwarzbach Production facility and 3 conductor pipes have been set to a depth of 85m below ground level. A flowline from the drilling pad to the Schwarzbach Production facility has been installed to facilitate tie-back and hook-up as these wells are completed and put into production.
The Schwarzbach South segment is undrilled, with 2C Contingent Resources of 2.4mmbbls described in the CPR. This segment will be the target of future development drilling.
About RED Drilling
RED Drilling & Services GmbH owns two fully equipped Bentec rigs which are rated up to 300 metric tonnes hookload and which are capable of drilling wells up to 5500m deep. Further information on RED Drilling can be found at: https://www.red-drilling-services.at/en
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.