Longboat Energy (LON: LBE) has been left disappointed after it made a non-commercial “minor oil discovery” in the southern North Sea.
Drilled in licence PL906, the Mugnetind exploration well encountered hydrocarbons in the Upper Jurassic Ula Formation.
The Ula formation was reached at a vertical depth of 3,985 metres below sea level, and consisted of a 28 metre gross section, with 14 metres of net sandstone of “moderate to good quality”.
The reservoir section in Mugnetind, which Longboat has a 20% stake in, is thinner than predicted as a thick layer of coal was discovered immediately underneath it.
The London-listed company said the well was drilled on a “seismic anomaly”, which hed been identified as consisting of hydrocarbons or coal.
Based on the operator’s preliminary estimates, the discovery contains recoverable resources of between 5 and 11 million barrels of oil equivalent (MMboe).
In isolation, the reserve is not considered to be commercially viable.
The well, operated by AkerBP, was drilled ahead of time and below budget. Iw will now be plugged and abandoned as planned.
Helge Hammer, chief executive of Longboat, commented: “While we are disappointed that Mugnetind has come in below pre-drill expectations, we will continue to review opportunities in the area and the potential for finding a commercial development solution. Nevertheless, having discovered hydrocarbons in all of our first three wells is a fantastic achievement by our technical team.
“Following our material discovery at Egyptian Vulture earlier this week, the Company is looking forward to the continuing fully funded well programme with Ginny/Hermine expected later in 2021 and the Kveikje and Cambozola wells spudding in the spring of 2022.”
Longboat was formed in 2019 by the management team of Faroe Petroleum, an Aberdeen-based business which fell to a hostile takeover by Norwegian company DNO earlier that year.
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