UK North Sea P2382
Offshore / Exploration
Envoi has been engaged by Summit Exploration and Production (the UK subsidiary of Tokyo based Sumitomo Corporation) to identify a partner to join in the exploration of its 100% owned and operated P.2382 Licence, covering Block 22/14c in the UK Central North Sea. Summit was awarded the 181.41 km2 Block in October 2018 as part of the 30th Licence Round with an initial Phase A work obligation requiring G&G studies and further reprocessing of the 3D MegaMerge+ seismic over the acreage, which has now been completed.
As a result, Summit has affirmed the K2 prospect, in the northern part of Block 22/14c, as ‘drill- ready’ and has already acquired the site survey to enable drilling at the earliest opportunity. Summit have also recently licenced new broadband data specifically over the K2 prospect, in order to carry out further work to optimise the drilling location and allow a rapid transition to development. The P.2382 licence requires that the final commitment to drilling the K2 prospect must be made to the OGA before March 2022 and the well drilled before March 2024. In the interim period Summit is seeking a farmee to join them in the drilling phase.
Block 22/14c is situated in the Tertiary sand play fairway of the Central Graben, with southward flowing Tertiary aged sands of the ‘Forties’ channel system’. These are proven reservoirs in a number of existing fields in the area including Everest, Huntington and Forties. Summit has combined inversion-derived hydrocarbon distributions with spectral decomposition to image the separate channel systems along the Forties fairway.
The K2 prospect itself lies immediately southwest of the Everest gas field and northeast of the Huntington oil field and is a four-way dip closure containing the same Forties reservoir sands. The AVO and mapped DHIs conform strongly to the K2 structure and are analogous to the proven hydrocarbon signal seen at Everest and Huntington. Although separated structurally from Everest by a saddle, similar AVO responses are distinct over both K2 and Everest but are absent over the saddle, which reinforces the separation and coherence of K2. The 22/14-1 well drilled close to the K2 prospect in 1974 encountered older cemented sands, but these lie outside of the closure and mapped AVO defining the K2 prospect. This well is analogous to the initial well (22/9-1) drilled into the Everest field in 1975, which also failed to find reservoir sand until the 1982 22/10a-2 well resulted in the discovery of the Everest gas field.
The K2 prospect contains an estimated ‘base case’ oil resource of 29 MMboe or in the gas case 135 Bcf + 5 MMbbls of liquids. The gas case would generate faster returns where a resource over >70Bcf (~12 MMboe equiv.) would be commercial being so close to existing infrastructure. A deeper K2 ‘Mey’ anomaly contains an additional 15 MMboe recoverable. Follow-on Forties prospects in the Block, Rustler and Rattler, also exhibit DHIs and would add a combined 58 MMboe of resources. The combined ‘base case’ Tertiary resource potential mapped in the Block is over 102 MMboe with an estimated upside in excess of 130+ MMboe. Interestingly, the Huntington field was found to contain larger reserves than its mapped 4-way dip closure due to either stepped or tilted hydrodynamic contacts. If similar contacts were defined by drilling K2, the resource potential could be bigger still.
The planned K2 well has an estimated cost of £12.8 million gross (dry hole with 15% contingency). Any development could be rapid due to the nearby infrastructure, with options for tie-back to any of Everest, Arran, Nelson or Forties. This ensures a short cycle project and a relatively quick return on investment. Summit is offering a minimum of 25% in Licence P.2382 and is open to negotiation from any potential farmees.