UK N Sea (P2248/P2252)
Envoi is engaged by UK AIM-listed company Cluff Natural Resources Plc (“Cluff”), to assist in securing one or more partners willing to earn into its two 100% operated Licences, P.2248 (Block 43/11) and P.2252 (Blocks 41/5 & part 41/10 and 42/1) located on-trend with proven-producing fields in the NW of the UK’s Southern North Sea. The total est.2.4 Tcf (P50) resource potential of the combined acreage, covering 589 km2 in water depths of around 60 metres, lies in a relatively underexplored part of the Southern Gas Basin where the full potential of the Permian, Triassic and Carboniferous plays have only recently been unlocked by modern 3D seismic reprocessing. Cluff’s new work has been instrumental in properly understanding these plays through accurate interpretation and mapping multiple new drillable prospects. Detailed amplitude analysis, rock physics and structural mapping, combined with good well control have shown for the first time, new detail of the proven plays – in particular their migration routes into previously bypassed play areas, including those now licenced by Cluff.
Licence P2248 contains multiple prospects, the largest of which is the Cadence Prospect with stacked Carboniferous reservoirs in a three-way dip closure, which has an estimated P50 prospective resource of 929 Bcf. Sourced from down-dip Carboniferous shales, it is sealed by regionally proven intra-Carboniferous and Zechstein evaporites. Upside potential in the Licence includes amplitude-supported Triassic Bunter Sandstone prospects created by halokinetic movement and large scale fluvial systems, which form both reservoir and are critical for migration and charge. Of these Bunter prospects, the Basset Prospect is relatively low risk, has an estimated 128 Bcf (P50) prospective resource, is drillable for as little as £ 6 million and, if successful, would significantly de-risk the two much larger follow-on prospects mapped.
Licence P2252 contains multiple prospects of which the Pensacola Prospect is a distinctive Zechstein reef (analogous to the BMB field in the East Permian Basin) with an estimated (P50) 424 Bcf prospective resource. Another is the Lytham-Fairhaven Prospect comprising a large low-relief faulted anticline with factured Hauptdolomite reservoir. This is a prolific producer in the Southern North Sea, where it is sealed by a thick regional Stassfurt Halite. Historical wells in the Licence drilled between 2004 and 2007 encountered 300ft of gas pay, but experienced near total fluid losses. Although this, along with recent inversion work, confirms the high-density fracturing, the drilling issues prevented testing. Modern horizontal drilling methods would enable testing to confirm reservoir deliverability and unlock the 168 Bcf (P50) prospective resource potential now defined by Cluff.
The total unrisked NPV of the combined 1.7 Tcf resources mapped in P2248 alone has been independently estimated to exceed £ 690 million as defined by a recent CPR by Xodus.
As all the commitments of the current Promote Term have been fulfilled, a ‘drill or drop’ decision is required by 30 September2018 to progress to the next term. Cluff is offering a material interest in each of its Licences in return for funding one new exploration well in each, likely to cost from £6 million (~US$ 8.4 mm equiv.) in P2248 and between £8–10 million (~US$ 11–14 mm equiv.) in P2252 with the acquisition of some infill seismic being considered in this Licence ahead of drilling.