Appraisal drilling at Ithaca K2 prospect ongoing with results expected in ‘next few weeks’

The results of a hotly-anticipated North Sea exploration well are due to be released in the “next few weeks”.

Ithaca Energy (LON: ITH) confirmed more details about reserves at K2 are in the offing after a “drilling success” at the prospect.

Last month the company announced that it had found oil and gas at the field – located in Block 22/14c of the Central North Sea – touting “encouraging well results”.

Sidetrack appraisal drilling is currently in progress at K2 as Ithaca, which holds a 50% working interest in in the prospect, seeks to firm up reserve estimates.

Investment banking giant Jefferies expects results from the exploration well to be released next month.

© Shutterstock

Speaking in the wake of the release of Ithaca’s half-year results on Wednesday, group chairman Gilad Myerson said: “We’re very happy to announce exploration drilling success at K2, our second exploration drilling out over the last few years. We had Fotla that you may recall in 2021, and now K2.

“We are in the process of the sidetrack appraisal and we’ll hopefully be able to announce details over the next few weeks.”

Drilling at K2, situated in water depths of about 90 metres, got underway in June using the Stena Spey rig.

According to independent estimates from advisory firm Envoi, K2 has estimated resource potential of 102 million barrels of oil equivalent, via numerous geological targets on the block.

© Supplied by Repsol Sinopec Resou

The prospect was also included on Wood Mackenzie’s coveted list of wells to watch last year.

Ithaca acquired its stake in K2 as part of a deal for Summit Exploration and Production – Dana Petroleum owns the remaining 50%.

It lies to the south-west of Harbour Energy’s Everest gas field and north-west of the decommissioned Huntington oilfield.

A tie-back to Repsol Sinopec’s Montrose hub, in which Ithaca has an interest, is thought by analyusts to be the “most likely” development option for K2.

In a research note, rig analytics group Esgian said: “The joint venture decided to drill the K2 prospect in January and hired Stena Drilling’s 5,000-ft semisub, Stena Spey, in February 2023. The rig left Scapa Flow to begin drilling operations in the North Sea in early June. On 26 July 2023, Ithaca announced successful exploration drilling at the K2 prospect together with the decision to proceed with follow on appraisal drilling.

“Results from the appraisal sidetrack are expected during September and will provide further data to determine a recoverable resource estimate and future development activity. The K2 prospect is part of the company’s strategy targeting opportunities close to existing infrastructure to maximise value.”