Spirit Energy will not carry its Pegasus West development forward to a final investment decision (FID), the operator has confirmed.
The Pegasus West field lies around 66 miles north-east of Flamborough Head on the North Yorkshire coast. Discovered in 2010, it spans several licences in Quadrant 43 – P2128, P1724 and P1727 – and forms part of the Greater Pegasus Area, comprised of Pegasus, Andromeda and Browney.
It is operated by Spirit Energy (61.25%), alongside partner Neptune Energy (38.75%).
Drilling of an appraisal well at Pegasus West 43/13b-7 confirmed commercial gas volumes in 2014, with the development targeted reserves of 83 billion cubic feet (bcf) of gas, around 14.5 million barrels of oil equivalent (boe).
A Spirit Energy spokesperson told Energy Voice on Monday that: “In line with Spirit Energy’s strategy for the UK and [Netherlands], a decision has been taken not to proceed with the Pegasus West Development.”
It follows last year’s decision by parent group Centrica to offload the company’s Norwegian assets to private equity-backed Sval Energi for around £800 million.
In December Centrica said that Spirit’s UK business would continue operating in “run-off” mode. Cash from Spirit’s operations will be used to meet its decommissioning obligations on its remaining portfolio, though it will pursue “potential opportunities” to use existing infrastructure for net zero projects.
It also comes in the wake of Siccar Point’s decision to “pause” the controversial Cambo development, following the withdrawal of partner Shell.
Dispute
The Pegasus development was delayed in 2019 in the wake of a dispute between Neptune and Spirit over the use of the Cygnus platform, prompting intervention by the Oil and Gas Authority (OGA).
In in the intervening period, Hague and London Oil (HALO) gave up its 45% stake in the Pegasus area, having described the project as “increasingly uncertain”.
However, last April the two firms said they had agreed to work together to speed up the development of the field, and expected a final investment decision in Q1 2022.
The deal saw Neptune and Spirit split equity on Pegasus West along the same lines as they do on the Cygnus facility – 38.75% and 61.25%, respectively.
Once sanctioned, Neptune said it would become operator of the field through to first gas and into production.
High-case production estimates for the project suggest it could produce 1.98 million cubic metres per day by 2025, bolstering output from the Cygnus field by 37-47%, Spirit said in its environmental statement.
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