A strategically important exploration well being drilled to the south of the Falkland Islands is expected to complete within the next 10 days or so.
Rumours are circulating stock market boards that the rig Leiv Eiriksson has encountered hydrocarbons while drilling Stebbing for Borders & Southern. They include that a large gas kick occurred, leading to a pause in drilling operations.
There appear to be significant hydrocarbon-bearing zones at the Stebbing location, which is on trend with B&S’s earlier find, Darwin, and various other prospects. The pre-drill estimate is up to 1.2billion barrels oil equivalent.
The company is of course hoping for light, sweet oil and analysis of the geology suggests a possibility of this.
B&S’s Darwin discovery made in the spring is gas-condensate and samples are currently being analysed in the UK to determine composition. The richer the better as condensate is a highly- prized commodity that can command a premium to North Sea Brent Blend.
The company is currently tendering for a further 3D seismic survey over Darwin, which suggests the company is confident that the discovery is probably commercial. The gas reserves estimate is up to 2.44trillion cu.ft of gas. It is suggested that there could be as much as 760million barrels of liquids present.
At a presentation to shareholders at the company’s annual general meeting on Thursday June 29, the company’s CEO, Howard Obee, indicated that the Darwin find will be comprehensively analysed. Pressurised samples arrived at a UK lab on June 18 and will take 10 weeks to analyse. The liquid is golden in colour – a super-light oil.
Also at the AGM it emerged that B&S is planning at least five more wells and it is already scouting for a suitable rig.
Earlier in the week, Falklands Oil & Gas (FOGL) announced a farm-out to Edison and stated that the Darwin discovery had increased confidence in its acreage, which is also located to the south of the Falklands, relatively close to where B&S has made its Darwin discovery and, all being well, Stebbing too.
Leiv Eiriksson will drill two wells for FOGL and rig handover is likely to take place during the latter part of this month. The first target is a large prospect named Loligo.
FOGL says that, if the initial Loligo results are encouraging, it will either be a further well on that prospect or a well on Nimrod, another prospect. Otherwise, a well will be drilled on the Scotia prospect.
The FOGL-Edison deal marks the first time a French-owned company has invested in oil exploration off the Falklands, as tensions between Britain and Argentina intensify on the 30th anniversary of the war.
The entire drilling programme is being managed out of Aberdeen by AGR, which is also in charge of the supply chain.
Indeed, the company has now logged two-and-a-half years running the current Falklands campaign, which started back in January 2010 when the rig Ocean Guardian arrived off Port Stanley to drill for Desire Petroleum in the first instance, also Rockhopper, which made the commercial Sea Lion oil find, and BHP (with FOGL).