The fresh downgrade of Hurricane Energy’s Lancaster box recoverable reserves estimates has led Norwegian power intelligence Rystad Energy to revise its expectancies for the UKCS general and say that the basin would possibly by no means once more hit output ranges of greater than 2 million barrels of oil identical a day.

Rystad has mentioned that oil and gasoline output within the United Kingdom’s continental shelf (UKCS) has declined ceaselessly since its height at 4.three million barrels of oil identical in line with day (boepd) in 1999, “never exceeding 2 million boepd after 2010.”

However, promising exploration effects via Hurricane Energy in fractured basement reservoirs, prior to now untapped within the UK, have been till previous this yr anticipated to restore the rustic’s output to two.1 million boepd via 2035, in keeping with Rystad Energy’s estimates. Now, Rystad says, the ones hopes had been dashed.

To remind, a technical committee just lately tested conceivable geological and reservoir fashions for the Lancaster box and located that estimated recoverable reserves, assuming no remedial motion, had been lowered from 37.three million barrels to 16 million, of which 6.6 million have already been produced.

“Major Blow”

“A recent jaw-dropping downgrade of Hurricane Energy’s Lancaster field revealed that the reservoir is more complex than previously thought. The result is a drastic resource downgrade for the company’s entire asset portfolio, as all its resources lie in fractured basement reservoirs. This is a major blow to the outlook for the UK’s future petroleum production, as fractured basement resources were estimated to account for nearly one-fifth of the future oil and gas output from the UKCS,” Rystad mentioned.

The downgrade has incited Rystad Energy to revise its manufacturing forecast for the UKCS. 

“Our projections now show that production will never again exceed the threshold of 2 million boepd but will instead reach a maximum of 1.7 million boepd in 2035 before dwindling to nearly nothing by the middle of the century. UKCS production stood at 1.65 million boepd last year and is set to fall to 1.59 million boepd in 2020,” Rystad mentioned.

Entire UKCS output forecast affected

“The complete UKCS long-term manufacturing forecast has been impacted relatively considerably. The major takeaway here’s that we would possibly by no means once more see any important manufacturing upsurge in UKCS manufacturing. A conceivable game-changer may just now most effective be a building of technical abilities for generating from fractured basement reservoirs to extend the restoration issue,“ says Olga Savenkova, upstream analyst at Rystad Energy.

Basement performs at the UKCS have been in large part disregarded when it comes to analysis and funding till Hurricane Energy emerged in 2004, based at the trust that those complicated reservoir programs have been a considerably untapped useful resource within the North Sea.

Hurricane

In its press commentary launched Thursday, Rystad Energy equipped a detailed historical past and research of Hurricane Energy’s Lancaster journey.

Rystad wrote:

“Hurricane first launched into an exploration marketing campaign to turn out the producibility of the Lancaster fractured basement and has since introduced tough result of greater than 2 billion barrels of oil identical (boe) in fractured basement reservoir assets believed to be found out.

Lancaster was the UK’s first fractured basement box in 2015 and is positioned at the Rona Ridge within the West of Shetland house. The reservoir is penetrated via six wells, the primary of which was once drilled in 1974. This first well-encountered oil within the basement reservoir, however because the basement was once no longer the drilling goal the possible was once discounted on the time.

In 2009, Hurricane launched into an exploration marketing campaign to turn out the producibility of the Lancaster fractured basement. Since then, Hurricane has drilled 11 wells throughout its licenses within the house and introduced 4 fractured basement discoveries: Lancaster,  Lincoln, Halifax and Warwick West. Hurricane is up to now the one corporate within the UK that has drilled into a fractured basement.

The first section of building of the Rona Ridge property, the Lancaster early manufacturing gadget (EPS), was once introduced on circulation in 2019. However, manufacturing information from the Lancaster EPS didn’t verify unique expectancies on reservoir houses. The reservoir force fell extra abruptly than expected, which result in a considerable useful resource downgrade around the fractured basement portfolio.

The downgrade has slashed Hurricane’s estimated assets via nine-tenths and induced the inventory to plummet. The general 2P+2C useful resource estimate for fractured basement assets dropped to 0.2 billion barrels of oil identical from the two.three billion boe reported via Hurricane in its 2017 competent individual’s record (CPR).

The restoration estimate for the 2 present wells at Lancaster EPS, assuming no additional job, has been greater than halved via Hurricane Energy, to 16.Zero million barrels from 37.three million barrels. The closing 2P reserves on 1 September 2020 are estimated to be 9.Four million barrels. Reflecting those new technical interpretations, the estimate of 2C contingent assets at Lancaster has been lowered to 58 million barrels closing from 486 million barrels within the 2017 CPR.”

“The 2C resources for the basement alone at the Lincoln field were reduced to 45 million barrels. Resource revisions for Halifax have not yet been  communicated but, based on the Lancaster revisions, we now estimate these resources to 88 million barrels – a  game-changing reduction from the previous 1.235 billion barrels,” Rystad mentioned.

According to Rystad, basement reservoir tendencies are identified all over the sector as oil-bearing and commercially productive, but stay in large part lost sight of. 

“Currently, more than 100 fields are producing from basement reservoirs, but the volumes produced are comparatively small as fractured basement reservoirs have low porosity and low-permeability rock. The rock is generally unable or very poorly suited to store hydrocarbons, but weathering and movements in the rock have created fractures where hydrocarbons can be stored and move inside the rock,” Rystad mentioned.

“To better understand the fracture network size and thus the reservoir size and oil volumes, an extended well test over a longer period is an  option. A shorter-duration test can say something about the reservoir quality and the achievable production rate but  cannot determine the size of the reservoir,” Rystad defined.