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Schwarzbach-2(2.) Well Update

18 Aug 2023 07:00

RNS Number : 7622J
Beacon Energy PLC
18 August 2023
 

18 August 2023

Beacon Energy plc

("Beacon Energy" or the "Company")

Schwarzbach-2(2.) Well Update

 

Beacon Energy (AIM:BCE), the full-cycle oil and gas company with a portfolio of production, development, appraisal and exploration onshore German assets through its wholly-owned subsidiary, Rhein Petroleum GmbH ("Rhein Petroleum"), announces an update on the Schwarzbach-2(2.) ("SCHB-2(2.)") well.

Summary:

· The SCHB-2(2.) well has encountered good quality oil-bearing reservoirs in the Meletta-Schichten ("Meletta") sandstones and the Pechelbronner-Schichten ("PBS") sandstones within the Stockstadt Mitte segment of the Erfelden field.

· An electric wireline logging programme has been completed and initial analysis shows good quality oil-bearing reservoirs with porosity ranges above pre-drill expectations.

· Initial evaluation of the logs over the PBS indicates a 34-metre gross interval containing 28 metres of oil-bearing net reservoir, with porosities averaging 18% and up to 28%, all of which significantly exceed pre-drill estimates.

· These oil-bearing reservoirs were encountered approximately 25 metres higher than prognosis with oil observed on the shale shakers and in the mud pit whilst drilling these intervals.

· No water-bearing sands were encountered in the Meletta or the PBS intervals.

SCHB-2(2.) electric wireline well logging results

The SCHB-2(2.) well reached total drill depth of 2,255m metres (1,717 metres True Vertical Depth) on 13 August 2023. This well was drilled to target hydrocarbons in the undeveloped Stockstadt Mitte segment of the Erfelden field, with 2P oil reserves of 3.784mmbbls assigned to this segment from the independent Competent Person's Report ("CPR") published by the Company in December 2022.

The electric wireline well logging has now been conducted in the well and is interpreted to have encountered good quality oil-bearing reservoir in the Meletta and the PBS reservoirs with porosity ranges above pre-drill expectations. The initial evaluation of the logs over the PBS indicates a 34-metre gross interval containing 28 metres of oil-bearing net reservoir, with porosities averaging 18% and up to 28%, all of which significantly exceed pre-drill estimates.

The target reservoirs were encountered approximately 25 metres higher than prognosis and oil was seen on the shale shakers and in the mud pit whilst drilling these intervals. No water-bearing sands were encountered in any of the target reservoirs.

The thicker oil-bearing net reservoir and higher range of porosities are better than pre-drill expectations and, in combination with the shallower target depth, have positive implications for both the reserves description and the future cash generative potential of this segment of the Erfelden field.

The operating team will now undertake reservoir clean-up, production testing and install the production liner to bring the SCHB-2(2.) well into production through the existing Schwarzbach facilities which are owned and operated by the Company. The expectation is that this production will be brought onstream over the next month.

The Company expects to provide a further update on progress of the SCHB-2(2.) well after undertaking the reservoir clean-up operation and production testing.

Beacon Energy Chief Executive Officer, Larry Bottomley commented:

"The SCHB-2(2.) well has now been safely, effectively and successfully drilled and logged, a testament to the quality of the Rhein Petroleum operating team who delivered a positive outcome despite encountering certain technical challenges through the drill. The well has encountered oil bearing reservoir in the Meletta and PBS sandstones, both shallower than predicted with the PBS being a thicker interval with more sand and of better quality than pre-drill estimates. These results imply significant upside to the reserve range assigned to the Stockstadt Mitte segment in the CPR published by the Company in December 2022, and this will be the focus of one of the post-well projects.

"The electrical wireline logs demonstrate that this well has the capacity to materially increase the Company's production and revenue as the well is brought onstream through our wholly-owned and operated existing facilities. This is a very important step in the Company's aspiration to build a self-funding platform for growth.

"In addition, the data provided from the SCHB-2(2.) well will help to de-risk the 2C contingent resources of 2.4mmbbls assigned to the adjacent Schwarzbach South segment which will be targeted during the further development of the Erfelden field.

"The operations team will now focus on completing the well for production and we will update the market as appropriate".

 

Enquiries:

Beacon Energy plc

Larry Bottomley (CEO) / Stewart MacDonald (CFO)

+44 (0)20 7466 5000

 

Strand Hanson Limited (Financial and Nominated Adviser)

Rory Murphy / James Bellman

+44 (0)20 7409 3494

 

Buchanan (Public Relations)

Ben Romney / George Pope 

+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

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.

Technical Standard

The technical information in this announcement has been prepared under the PRMS - Petroleum Resources Management System created by the Society of Petroleum Engineers, a global standard of petroleum reserve and resource classification together with guidelines and accepted methodologies for the definition and estimation of petroleum resources and their monetary valuation.

Qualified Person's Statement

Mr Larry Bottomley, CEO at Beacon Energy, has reviewed and approved the technical information contained within this announcement, in his capacity as a qualified person, as required under the AIM rules. Mr Bottomley has over 40 years' experience in the oil & gas industry, prior to which he studied Geology (BSc.) at Imperial College, University of London, followed by Stratigraphy (MSc.) at Birkbeck College, University of London.

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 mainly depleted Kuehkopf segment, the producing Schwarzbach Main segment, the Stockstadt Mitte segment which is the focus on the current development programme 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 (a wholly-owned subsidiary of Beacon Energy) 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 (37-38o API) from the SCHB-1a well through the Schwarzbach Production facility.

 

The Schwarzbach-2(2.) development well (SCHB-2(2.)) has now proved the commercial potential of this segment. 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(2.) production well and subsequently an additional 2 wells; a producer and a water injector. The aim is that these additional wells will be drilled funded from the free cash flow generated by production from the SCHB-2(2.) well.

 

The drill pad for these 3 wells was prepared immediately adjacent to the Schwarzbach Production facility, which is wholly-owned and operated by the Company, and conductor pipes for each of these wells were set to a depth of 85m below ground level. A flowline from the drilling pad to the Schwarzbach Production facility will allow tie-back and hook-up as these wells are completed and put into production.

 

The Schwarzbach South segment is undrilled, with the 2C Contingent Resources of 2.4mmbbls described in the CPR now significantly de-risked by the results of the SCHB-2(2.) well. This forward plan is that this segment will be the target of future drilling.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
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12

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