Premier Oil has entered into an infrastructure partnership for the Tolmount gas development in the Southern North Sea, as the company looks to deliver first oil from Catcher in 2H 2017.
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Map of Catcher, Tolmount. Source - Premier Oil. |
The company signed a deal with Dana Petroleum and CATS Management for Tolmount, in which the front-end engineering and design (FEED) is underway on the first phase of the project. The agreement will see the trio jointly construct and own the Tolmount platform and export pipeline as a standalone development, as well as undertake the onshore modifications at the Dimlington terminal.
The Greater Tolmount Area, in Block 42/28d, has the potential to contain up to 1 Tcf, including the fully appraised Tolmount main structure of 540 Bcf and upside at Tolmount East and Tolmount Far East, which is estimated to hold 220 Bcf and 150 Bcf of unrisked gas resource, respectively.
The field will be tied-in to the platform and a tariff will be paid to the infrastructure owners for the transportation of gas production through the infrastructure over the life of the field. Premier will maintain its 50% equity interest in the licence.
Premier says that its share of the capex required to develop the large gas field is now estimated at only US$100 million.
“On this basis, Tolmount is a very attractive project, meeting our economic thresholds even at low gas prices, allowing us to use our UK tax losses and with significant further reserve upside,” says Premier Oil.
Subsurface studies on Tolmount East and Tolmount Far East continue ahead of any future appraisal drilling.
In February 2017, Tolmount’s development concept, comprising a standalone normally unmanned installation (NUI) and a new gas export pipeline to shore, was selected. In the initial phase, which will target the Tolmount main structure, it is expected to recover 540 Bcf (P50 estimate) of gas from four producing wells at a plateau production capacity of 300 MMcf/d (gross).
“The first half saw good progress on the Catcher and Tolmount projects, a world class exploration success in Mexico and the acceleration of cash flow from disposals. Following the successful completion of our refinancing, we are ahead of plans to restore financial strength while progressing a number of exciting projects for future growth,” says Tony Durrant, Premier chief executive.
Catcher is set for first oil in 2H 2017. Its total capex is estimated at $1.6 billion, 29% lower than at sanction.
“We now look forward to a rising production profile delivered from our low operating cost base and lower committed capital expenditure as the Catcher field comes onstream,” says Durrant. “Our focus for the second half of the year is to deliver first oil from Catcher on schedule and under budget, to complete our planned disposals and to bring forward to board sanction the Tolmount field.”
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