Privately financed UK company Chrysaor has started pre-drill studies ahead of appraisal drilling on the Spanish Point discovery in the Porcupine Basin on the Irish Atlantic Frontier.
Spanish Point is a gas-condensate discovery which is located in frontier exploration licence (FEL) 2/04. This licence also contains the Lower Cretaceous Burren oil discovery
A budget has been approved that includes provision for well design activities as part of the ramp up to a 2013 appraisal drilling campaign at Spanish Point. Drilling targets have already been high-graded.
Currently, the plan is to spud the initial appraisal well during Q3 2013 subject to rig availability and Dublin governmental approvals.
The partners Providence, Chrysaor and Sosina also agreed to the transfer of operatorship of the FEL2/04, FEL4/08 licences, and licensing option 11/2 from Providence to Chrysaor, subject to Irish government approval.
The Spanish Point Lower Cretaceous Burren oil discovery is situated in the Main Porcupine Basin about 200km off the west coast of Ireland where the water depth is around 400m.
Under the terms of a 2008 farm-out agreement that gave Chrysaor entry to the Spanish Point licence, the company elected to exercise its option to drill up to two appraisal wells on the discovery, which was made more than 30 years ago by Phillips Petroleum.
In return for committing to such a significant work programme, its interest in FEL2/04 and the adjacent FEL4/08 increased from 30% to 60%, with Providence and Sosina retaining 32% and 8%, respectively.
As part of the agreement, Chrysaor, led by CEO Phil Kirk, provided a financial cap on Providence’s and Sosina’s financial exposure to the appraisal drilling costs.
Spanish Point was located by Philips in 1981. Oil and gas were discovered in Upper Jurassic Volgian sands with one zone flowing at about 5million cu.ft and 1,000 barrels of ultra-light oil per day.
The discovery was not appraised due to lack of gas infrastructure and market in Ireland at the time.
In 2004, Providence and Sosina licensed the discovery and following in depth subsurface and pre-development studies, Chrysaor farmed in during 2008 by agreeing to fund a 300sq km 3D seismic survey that was acquired in 2009.
Evaluation of this data has confirmed a resource level of up to 510million barrels oil equivalent of which about 200million is thought to be recoverable.
Peak production rates have been modelled at over 70,000 barrels oil equivalent per day.