Stratic Energy upbeat on West Don despite lower recoverable reserves
19 November 2009
Oil and gas group Stratic Energy has reported mixed news from the latest assessments of its producing assets on the West Don field in the North Sea.
Stratic recently sold off part of its portfolio, including Breagh in the North Sea and operations in Italy, in order to reduce its debt exposure. That has left it with a strong focus on the West Don field, where it has brought in independent consultants from Ryder Scott to assess the performance.
The bad news is that the ultimate recoverable reserves from the field will be approximately 9% lower than previously anticipated. However, as a result of low production levels in 2009, net remaining recoverable reserves at December 31, 2009 are now estimated to be 1.72 million barrels at the proved level and 2.84 million barrels at the proved and probable level – respectively 33% and 16% higher than estimated previously.
Stratic also believes that first indications of pressure support from water injection are now evident in both West Don wells and production levels are beginning to improve.
Work to improve the reliability of gas lift equipment ahead of the planned tie in to the Thistle facilities continues, and the tie in remains on schedule for the first quarter of 2010.
In addition, Stratic thinks that a third production well will be required in the southern part of the field. It is now working with its partners on plans for drilling work in the summer of 2010, with production from the well expected to commence in late 2010.
Mark Bilsland, Stratic’s chief operating officer, said: “At current Brent oil prices of around $75 a barrel, the production levels indicated in Ryder Scott's recent report would yield pre-tax operating cash flows totalling over $80 million net to the company in 2010 and 2011. Furthermore, it is clear that the future value of the field to the company remains materially unchanged.”
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