UK North Sea-focused oil and gas company IOG, working to develop gas fields in the Southern North Sea, has shared the results of its first development well being drilled as part of Phase 1 of its Core project.
The company said the output rates were above expectations, but that there had been several mechanical issues during the drilling, which would eventually lead to a delay with first gas production from the project.
The Core Project comprises gas resources across six discovered UK Southern North Sea gas fields. Phase one, approved by the OGA in May 2020, will focus on the development of Blythe, Elgood, and Southwark fields.
The company started drilling at the Elgood development well, 48/22c-H1 using the Noble Hans Deul jack-up rig in April.
In an update on Monday, IOG said the well test rates were ahead of expectations, with a maximum rate of 57.8 mmscf/d of gas and 959 bbl/d condensate through a 80/64[th] inch choke, constrained by surface facilities on the Noble Hans Deul jack-up rig.
The Elgood field is planned to be produced as a subsea tie-back, via the 6" pipeline laid in Q4 2020, to the platform at the Blythe field once the single development well at the latter has also been drilled.
"The subsea tree will be controlled via the umbilical being installed over the coming weeks as part of the summer 2021 subsea installation campaign.
Mechanical issues delay Blythe well operations
A number of mechanical issues were experienced on the Elgood well since it spudded on April 9, 2021, which extended it beyond the initially expected three-month duration.
"The company has collaborated closely with Well Operator Petrofac and its key drilling contractors, Noble Corporation and Schlumberger, to overcome these challenges and execute the well as safely and efficiently as possible," IOG said.
IOG said it had, together with contractors, investigated the root causes of these issues and that it was putting in place protocols and procedures to limit the potential for similar mechanical issues to occur in subsequent wells.
The Noble Hans Deul rig is expected to mobilize within the next week to the Blythe field where it will drill the development well through the Blythe platform, before moving on to Southwark.
"Due to the extended duration at Elgood, the Blythe well despite being shorter is now expected to be completed by October 2021, and Phase 1 First Gas, therefore, to occur in Q4 2021. The Elgood reservoir was encountered 39ft deep to prognosis," IOG said.
IOG works to determine recoverable gas
IOG said that is preliminary integration of the well data, prior to the well test, had indicated that the range of ultimate recoverable gas might be less than the pre-well estimates.
"The company will undertake a full technical review to determine an updated range of ultimate recoverable gas from the reservoir, which will require further modeling and analysis of several months of production. In the meantime, in light of the higher than expected clean-up flow rates combined with the high forward gas pricing environment for the coming year, management believes that near-term Elgood cashflows are likely to exceed the company's planning base case," IOG said.
Andrew Hockey, CEO of IOG, commented: "Delivering our first development well at Elgood is another important milestone for IOG and a surface-constrained maximum well test rate of 57.8 mmscf/d and 959 bbl/d condensate is encouraging for initial production rates. We expected the Elgood well to be technically challenging, being the first development well drilled on the smallest Phase 1 field and the only subsea tie -back in the programme.
"The mechanical issues experienced have indeed tested my team, but thanks to their hard work, resourcefulness, and diligent collaboration with our key contractors, Petrofac, Noble Corporation, and Schlumberger, we have now completed it safely and successfully. In that respect, I would also like to acknowledge the continued support of our Joint Venture partner CalEnergy Resources (UK) Limited.
"The Elgood volumetric range will be revised once we fully integrate well and production data. Initial field revenues look likely to be strong given the positive well test rates and the very buoyant gas market, with Winter 2021 prices currently over 90p/therm.
"We will shortly be spudding the Blythe well, which is expected to take under three months, after which we can provide a more comprehensive view of initial Phase 1 production rates."