Frontier Exploration Licence 6/14
NEWGRANGE Gas Prospect (80%, Operator)
FEL 6/14, located in the Goban Spur Basin, some 260 km off the southwest coast of Ireland, was originally awarded to the Company (80.0%) and its partner Sosina (20.0%) in October 2011 as LO 11/11 during the 2011 Irish Atlantic Margin Round. In April 2014, LO 11/11 was converted into FEL 6/14 with the same working interests.
The Newgrange prospect is a similar Lower Cretaceous carbonate playtype to the recently drilled Dunquin North residual oil accumulation, with best estimate recoverable prospective resources of c. 1.126 BOE covering an area of c. 1,000 km2. Subsurface studies have also highlighted potential underlying clastic exploration prospectivity within the Jurassic interval. Seismic interpretation of 2D reflection profile data have revealed the presence of two large stacked four-way structural closures at both Base Cenozoic (Top Cretaceous) and Base Cretaceous levels. The Newgrange prospect is located in c. 1,000 metre water depth. However, it is notable that the crest of the Cretaceous closure is just c. 500 metres below the seabed which means that this prospect should be particularly cost effective to drill. The previously drilled 62/7-1 well, which was located c. 30 km from the Newgrange prospect and was drilled down-structure, encountered hydrocarbon shows in sands of Lower Jurassic age indicating the presence of an active petroleum system.
In 2014, a non-exclusive multi-client 2D seismic survey was acquired over Newgrange and the surrounding area, of which the Company licenced c. 2,500 line km of data. Geopressure analysis from these newly acquired 2D seismic data indicates the likely presence of top-seal at Newgrange. Pre-stack seismic inversion and rock physics analysis showed low acoustic impedance, indicative of good quality reservoir within the Lower Cretaceous section. Mapping of these newly acquired 2D seismic data indicated the pre-rift Base Cretaceous Newgrange structural closure to be much larger than previously thought covering a total area of c. 1,800 km2 with c. 1,000 km2 within the Company’s licenced area. The Irish government has recently offered awards of new Licensing Options in the nearby southern Porcupine/Goban Spur area – notable licensees include ExxonMobil, Statoil, Nexen (CNOOC), Woodside & ENI (in conjunction with BP).
In July 2016, the Company provided a further technical update on the Schlumberger Exploration Collaboration Project over certain of its assets in the southern Porcupine and Goban Spur Basins, offshore Ireland (the ”Collaborative Project”). This second technical update focused on the Lower Cretaceous Newgrange carbonate prospect. A revised volumetric estimation was carried out for the Newgrange prospect incorporating the recently acquired (2014) 2D long offset seismic reflection profile data as part of the Collaborative Project. This work significantly increased the un-risked prospective resource potential to c. 13.6 TSCF GIIP (Pmean, Gas Case) or c. 9.2 BBO STOIIP (Pmean, Oil Case). Oil and gas cases were modelled due to the uncertainty in the hydrocarbon phase which may be applicable in this area. The top seal capacity at the Newgrange prospect was considered to be a significant risk given its thin nature (c. 500 metres of overburden) and so a seal capacity analysis, which utilized offset well data, seismic velocity data and surface mapping was undertaken and this indicated that the present day top seal could potentially contain up to a c. 350 metre hydrocarbon column. The seal capacity analysis was taken into account in the updated volumetric estimate. With operations currently being planned for the Druid exploration well in 2017, an internal scoping assessment of the incremental costs for an additional well on the Newgrange prospect was subsequently carried out. Capitalizing on economies of scale, this initial study indicates that such a well would cost less than c. $22.5 million (gross) with significant areas of further potential savings having been identified.