A&D marketing for the oil and gas industry



Onshore Appraisal, Development and Exploration

Envoi has been commissioned by UK LSE-listed Cadogan Petroleum, to assist in its search for a partner interested in earning part of their 95% owned and operated Bitlyanska Licence, situated in Western Ukraine on the border with Poland. Significantly, this is part of the regionally extensive and highly productive Carpathian play trend, one of the world’s oldest producing hydrocarbon fairways that stretches from the southern Poland through the Ukraine and down to the south east into eastern Romania.

Cadogan would now like to find a partner to both accelerate the appraisal and development of the two existing discoveries in their acreage and explore a prospective shallow structure analogous to a nearby depleted field, by participating in the drilling activities being planned in the current second exploration term which expires in December 2019.

All seven Soviet era wells drilled within the present-day Licence area encountered oil and gas shows in the Tertiary clastic plays structured in the Carpathian fold belt, but were drilled to define the stratigraphy so not located to test closure. In 1972 the deep Borynya-1 (Bor-1) well penetrated the southern part of the present-day Licence and was reported to have blown-out which proved the potential for a commercial play. The subsequent Borynya-2 (Bor-2) well, drilled between 1978 and 1981, later encountered gas bearing sands at various levels within the same Tertiary play, of which just one level tested 14 MMcfdg. Cadogan acquired the Licence in 2008 and drilled the Borynya-3 well in 2009, which confirmed the same hydrocarbon bearing plays of the previous wells; although drilling had to be stopped due to a high-pressure gas influx that was beyond the safe capability of the rig and equipment being used. A short open hole test was achieved between 3,542m and 3,656m that flowed up to 4.5 MMcfd gas before suspending the well. Subsequent evaluation of the gas on Bor1 & 2 well logs confirmed multiple gas bearing zones between 2,148m & 5,325m.  The 120 km of infill 2D seismic acquired in 2010 later enhanced the interpretation and confirmed the hydrocarbon potential of the Oligocene sandstone plays defined by the historical drilling.

The subsequent 2013 re-entry and testing of just the upper reservoir intervals in the Bor-3 well, was inconclusive after flowing gas, oil and condensate. Testing the deeper and potentially most productive zones will require heavier rig and specialist high-pressure control equipment. The well remains suspended but is continuously monitored and gas bled-off as and when required. The Borynya accumulation has been independently evaluated and estimated to contain 0.8 MMboe of 2P and 1.6 MMboe of 3P reserves. Additional P50 contingent (2C) resources are estimated to be around 12.5 MMboe of gas and condensate. Rapid development of the field would be assisted by proximity to existing pipeline infrastructure only 15 km away.

Cadogan’s Licence also contains the Bitlya field which is a similarly deep discovery made in 1992, comprising multiple gas bearing zones. Only one of these was tested at modest rates due to poor drilling practices and resulting formation damage. This discovery has an estimated P50 resource of 0.8 MMboe 3P and Contingent 2C resources of 0.64 MMboe gas and condensate.

Cadogan has also mapped the Tertiary Vovchenska prospect in their Licence which lies close to the shallow, but now abandoned, Vovchenska oil field, situated in the northern part of the Licence and which contains hydrocarbons between 300m and 2,000m. The combined resource potential of the Bitlya discovery and undrilled shallow Vovchenska oil prospect are estimated capable of containing 0.8 MMboe of 2P and 3.2 MMboe of 3P reserves and 14.8 MMboe of 2C (contingent) resources.

Cadogan would now like to find a partner willing to earn a material equity interest in their Licence in return for funding 100% of the proposed work programme involving:

– A shallow well and potential testing of the shallow Vovchenska Prospect at a combined estimated cost of only US$ 1 million.

– Re-entry and effective re-testing of the Borynya-3 discovery well which is likely to cost around US$ 3 million.

– A new appraisal well and subsequent testing, estimated likely to cost US$ 7 million.

The recent government decision to reduce the subsoil use tax (royalties) for new gas wells from 29 % to 12% (6% for wells deeper than 5,000m) has substantially improved the economics of developing the Bitlyanska discoveries.