Onshore UK
Onshore / Appraisal Development
Envoi has been engaged by UK-based AIM-listed Europa Oil & Gas Plc (“Europa”), to assist in the farmout up to half of its 40% operated interest in the PEDL 343 Cloughton licence situated in the Cleveland Basin. This can be earned in return for funding of the new 3D seismic being planned and a subsequent well to appraise and develop the Cloughton gas discovery. Fellow partner, Egdon Resources, is also offering up to half of their 40% interest in the Licence, so up to a material 40% interest is therefore available for farmout from their combined interests.
PEDL 343, covering 110 km2, contains two adjacent blocks, TA09 and SE99a and was awarded in the 14th Round to groups led by Europa and Third Energy. The current group comprising partners Egdon 40% and Petrichor 20% has been operated by Europa since June 2023. The Cloughton discovery was originally made in 1986 when lower poro-perm gas discoveries were at that time uncommercial due to the low commodity prices. Modern reservoir stimulation, much higher and sustained gas prices and interest in hydrogen and CCS have all contributed to the Cloughton field’s newly defined potential. A two year extension was granted in February 2024, which can be followed by a second term, after which a 20 year production licence can be applied for.
The Cleveland Basin is relatively underexplored. Its productive plays consist mostly of Carboniferous and Permian reservoirs, sourced by underlying Carboniferous coals and shales. Unlike many of the other onshore Cleveland Basin fields which produce from fractured Zechstein reservoirs that quickly water out with flow from fractures. Cloughton is more of a standalone onshore analogue of the offshore SNS fields, with stacked Namurian sandstone reservoirs within the Millstone Grit stratigraphy, sourced by gas-prone Carboniferous coals. These mostly medium to coarse fluvial sandstones stacked sands are up to tens of metres thick at Cloughton, with almost 100% net to gross. Porosities range from 5 to 10%, with permeabilities up to 10 mD. The multiple channel sands are more thickly developed in the hanging walls of extensional faults and where inverted by Variscan compression, these lie over the crests of the anticlinal rollovers. A thick seal is provided by intra-Carboniferous siltstones and mudstones and the overlying world class Zechstein sequence.
The Group’s new work suggests that further 3D seismic and the new well pad will allow access to a Pmean 137 Bscf GIIP. The new 3D planned for Q4, 2025 / early 2026 is designed to allow better definition of the stacked Carboniferous reservoir sands to ensure the best location for their appraisal and stimulation. This appraisal well is expected be to south of the original 1986 Cloughton-1 discovery well and drilled to a depth of around 2,988 metres MD, ensuring the penetration of a 500 metre sequence of the stacked gas sand reservoirs. Staged stimulations are predicted to be able to generate flow rates up to 10 MMscf/day from the stacked Namurian/Dinantian sands so far identified. Based on Europa’s experience drilling similar Carboniferous sand reservoirs in Germany, the GIIP is probably an underestimate as it relies on net sand with a porosity cut off. The German analogues confirm that gas flows have a much longer production tail with flow provided by the lower quality but still gas charged material. As a result, the economics show that Cloughton’s post-tax NPV10 value could be in excess of £63 million over the field’s life.
Europa and Egdon are jointly offering up to a 40% interest in their project in return for funding the new 3D seismic being planned for late 2025 and the first new appraisal well in 2026, which are estimated to cost £ 5.6 million sterling net to Europa and Egdon’s combined 80% interest).
