A Canadian oil and gas company announced “significant upward revisions” yesterday of estimated resources in its operated Cladhan oil field north-east of Shetland.
Sterling Resources, which has an operational HQ at Banchory, said the revised figures for oil in place followed success in drilling two sidetracks from the original discovery well.
Sterling said an independent assessment by RPS Energy of oil in place had led to an increase in prospective resources from 65million to 93million barrels, with a further 74million of prospective resources in an area not previously assessed by RPS.
Including “possible resources”, the discovery could contain as many as 311million barrels.
Sterling chief executive Mike Azancot: “These revised numbers independently confirm the magnitude of our recent drilling successes at Cladhan. The significant upward revisions from just two new data points in high-quality sands in which we have yet to find an oil-water contact indicate the large potential for Cladhan.
“Additional drilling will be required to further delineate the size of this discovery.”
The company anticipates another drilling campaign at Cladhan in the first quarter of 2011.
It is also initiating evaluation work for potential development scenarios.
Partners in the licence are Sterling (39.9% and operator), Wintershall (33.5%), EnCore Oil (16.6%) and Dyas UK (10%).
Alan Booth, chief executive of UK-based EnCore, said: “This is an excellent outcome from the recent drilling campaign. Even though we have yet to establish an oil-water contact, these figures suggest oil in place potentially in excess of 250million barrels. Significant upside still remains on the block as can be seen from Sterling’s possible oil in place figures.”
Mark McCue, a divisional director at investment manager and financial-planning specialist Brewin Dolphin in Aberdeen, said: “After EnCore acknowledged Sterling Resources’ announcement of the find estimation at Cladhan, EnCore’s shares fell by around 10%, but closed off 4.2% at 119.75p.
“It would appear that the drop in the share price was a combination of the market having already factored in the find and investors still showing nervousness over the delay to the Galaxy II rig for EnCore’s Varadero prospect in the UK central North Sea.”
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