Catcher - Further Exploration Starts

27th Sep '10 by doverbeach

116 comments 49437 reads

The Transocean Galaxy II heavy duty jack-up rig is expected to return to the Catcher area later this week to drill up to four exploration and appraisal wells. The first well in the programme is on the Varadero exploration prospect situated to the west of the Catcher discovery.

Encore Oil (LON:EO.) and Nautical Petroleum (LON:NPE) each have 15%, Premier Oil (LON:PMO) has 35% - the rest is owned by Wintershall and Agora. Varadero is shown here - 28/9B.

From this Premier presentation, the prospective wells and sizes are:

Varadero	40mmbo
Burgman	45mmbo
Carnaby	60mmbo

From the Nautical map above, it looks as though Burgman will be the next to be drilled after Varadero. Then 28/9C is another well on Catcher itself. But these plans may alter wiith the drilling results.

Nautical's website gives a detailed summary of the previous Catcher successes:

The 28/9-1 vertical exploration well was drilled in June 2010 to a Total Depth of 5,219 ft Measured Depth (M.D.) and encountered excellent quality oil bearing reservoir sandstones at the target Cromarty Sandstone level. The discovery well encountered a 240 ft gross oil column with a net pay of 90ft. An oil water contact was intersected at 4,840ft (M.D). Following the discovery a reservoir test was completed. The test confirmed the following key fluid parameters: Oil API Gravity = 30 degrees, Gas Oil Ratio (GOR) = 280scf/bbl, Oil viscosity (at reservoir conditions) = 4 centipoise. Well test interpretation showed the reservoir to have an average permeability in excess of 1.5 Darcies.

Subsequent to the reservoir test the co-venturers drilled the 28/9-1Z Catcher East side-track which encountered excellent quality oil-bearing sandstones very similar to those seen in the Catcher discovery well. Analysis of the wireline logs indicated 82 ft (M.D) of net hydrocarbon pay over a gross interval of over 236 ft (M.D), with an average porosity of 34 per cent., average hydrocarbon saturation of 89 per cent. and excellent permeability. Pressure data indicated a common pressure regime between Catcher East and Catcher confirming both discoveries to be part of a single significant oil accumulation, with an oil column…

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Fangorn

8th Jan '11

Pro,

I wouldn't place much weight in Goldman's rating Encore a "Sell" either, they did after all give Hawk a "Buy" rating! Despite that their weighty tome that was the 296 page research report into the Oil E&P sector was a thoroughly interesting and informative read. Whilst I agree most of their ratings seemed to be spot on, the above two were the glaring anomalies in my view.

Surely it sould've been Encore Buy, Hawk Sell, the latter clearing being an utter disaster.

doverbeach

13th Jan '11

Perhaps not Burgman next! From today's Premier Update

Following the successful Varadero well previously announced, the next well on Block 28/9 will be either Burgman or Catcher North, with the drilling order dependent on the weather window available to move the rig from the Varadero location. The success at Varadero has de-risked several of the remaining untested prospects on the licence, which could add considerable reserves to a Catcher development. [my bold]

This is good news - previously drilling Carnaby was dependent on getting a good result at Burgman - now they must be confident enough after Varadero to drill it straight away.

PMO give target sizes, as:

Burgman	35/50/70
Carnaby	50/65/80
Catcher Norther	15/20/30

flyingbull

Hi db, That looks like a narrow range of target sizes, suggesting a higher degree of certainty, as compares with perhaps previously? fb

well the advfn bulls would no doubt say it is Premier hoping to buy Encore on the cheap

db

marben100

Thanks db... but, you say:

Premier's announcement, however, says:

Following the successful Varadero well previously announced, the next well on Block 28/9 will be either Burgman or Catcher North

So, surely, it's still Burgman before Carnaby?

This image from Nautical's website shows why:

Burgman is a stacked play, with a potentially huge (but low CoS) Jurassic target, as well as the (now high CoS, following Varadero) Tay and Cromarty sands encountered at Catcher and Varadero so far. Hence, I'm sure the partners are very keen to drill it.

Worth noting also that, despite Premier's larger share, Encore remains operator for block 28/9.

Nautical's webpage also says:

In December 2010, the Varadero exploration well 28/9-2, was drilled to a Total Depth of 5,205 feet M.D. and successfully encountered high quality oil bearing reservoir within the target Tay Sandstone.

The Tay formation had a gross thickness of 186 feet with a calculated net pay of 84 feet. Analysis of the logs indicates the reservoir quality is excellent, with high permeability, average porosity of 35% and average oil saturation of 84%. In addition to the primary Tay interval there is a further 22 feet of net hydrocarbon pay in thinner sands. Extensive wireline sampling and pressure testing was carried out which indicate that the reservoir fluids are oil with an API of approximately 26 degrees.
The next well on the drilling sequence for the Transocean Galaxy II heavy duty rig is the Burgman well.

Cheers,

Mark

thebuffoon

14th Jan '11

Mark,

I can't recall where, but I am certain that I read a quote from Premier stating that they were very happy with the job that EO were doing as operator. I guess this will only change when we are bought out.

EO seem very keen to get on with drilling. I assume this is because they want to keep the SP moving north as a defence against opportunistic bids. :^}

I also recall AB confirming that Carnaby is dependent on Burgman, and so it's definitely either Burgman or Catcher North next.

Buffy

alano20

Yes, repo on TMF qotes an email he got from Encore:

You are correct that the plan is to drill Burgman next. However, to move to and set up operations at Burgman requires a longer weather window than to move to and set up at Catcher North so, rather than sit around waiting for a longer weather window to come up to move to Burgman, if a short weather window presents itself, we will move to Catcher North first. Burgman will still be drilled but it may just be in a different order. It is all dependent on the weather.

http://boards.fool.co.uk/hi-manzanilla-the-answer-is-here-from-encore-dear-12148286.aspx

ohisay

17th Jan '11

Biggish upgrade for NPE I notice.

(Be nice to see the detailed overlap with EO.)

1226 GMT [Dow Jones] Canaccord raises Nautical Petroleum (NPE.LN) price target to 592p from 522p after recalculating the company's net asset value. Using a Brent crude oil price of $70 a barrel, and with a 12% discount rate, Canaccord estimates Nautical has a net asset value of 592p a share. "The past year has been transformational for Nautical with positive newsflow from each of its key assets leading to a material de-risking of the portfolio," says Canaccord. The rating remains buy. Shares gain 0.8% at 470p.

muckshifter

24th Jan '11

There's been quite a bit of speculation elsewhere about an imminent spud on the next well in the Catcher programme, which I hope is correct, but the ship/crew/supplies movements identified look more like an acknowledgement of a few days of poor weather with no chance of movement to me.

But what does interest me is why, in a situation where movement between drills is so weather dependent and the work is going on in a North Sea winter, the opportunity to carry out a flow test doesn't seem to be catered for.

Presumably, once the rig goes out to sea it stays "on hire" until return to port. My understanding (which is probably wrong) is that flow testing might take a week, or less if say a single interval was tested. So I think my question really is, are movement opportunities, ie NS weather, so variable on a day to day basis that the rig operator is unable to risk carrying out a flow test when the movement forecast is poor, or is it a pre campaign decision not to test which requires too much head scratching and resource upheaval to change?
Regards.

SW10Chap

are movement opportunities, ie NS weather, so variable on a day to day basis that the rig operator is unable to risk carrying out a flow test when the movement forecast is poor, or is it a pre campaign decision not to test which requires too much head scratching and resource upheaval to change?

The answer is likely to be (b): a pre campaign decision not to test which requires too much head scratching and resource upheaval to change?

As a well as a rig, you also need quite a lot of kit on-board, along with the specialists to screw it together and read the dials. Getting it out there involves boat-trips - even screwing it together is quite an undertaking...

SW10

repobear

The main objective of the well is to appraise the Tay and Cromarty reservoirs to the North of the Catcher discovery made in June 2010, at estimated depths of approximately 4,300 feet (Tay) and 4,500 feet (Cromarty) True Vertical Depth Sub Sea.

Catcher North is the second well in the current drilling campaign after the group took advantage of a weather window suitable for mobilisation from Varadero to the Catcher North location. Burgman will now be drilled following Catcher North.

http://www.investegate.co.uk/Article.aspx?id=201101241030049553Z

http://www.nauticalpetroleum.com/AGM-Nov10v2.pdf

P23. One of the smaller prospects on the block.

repo

Whipstock

....there is also considerable time required to get all the permits in place - agreement from the rig's classification society to put well test equipment on board, permit to flare, HSE approval for the test programme, so unless it was planned from the start it is unlikely to be added on later.

25th Jan '11

Sector watcher comment from FTalphaville today.

NPE and its partners announced the spudding of the Catcher North exploration well yesterday morning, the second in a four-well programme on licence 28/9, and hot on the heels of the Varadero success.
Estimates of the size of the prospect appear to vary, with operator Premier Oil assuming 20m barrels recoverable whilst NPE are going for a punchier 26m barrels. Assuming the higher number and a $70/barrel long-term oil price this equates to around 30p/share net to NPE's 15% interest unrisked, or 45p/share if we assume the forward curve. Even after the stand-out 700% share price performance last year, we continue to like NPE.
Our current risked NAV of 592p/share represents a 23% premium to the current price of 480p/share, although I reckon that using more aggressive oil price assumptions, derisking the Kraken discovery and allowing some risked exploration upside, then this is a 1000p/share stock

REO100

A bit cheeky, EnCore are the operator :-)

Reo

26th Jan '11

I am interested as to any views on Tudor Rose discovery, Buffallo, Spaniards and Merrow. I recall from the AGM decisions would need to be made early this year and no later than April on Tudor Rose. The normal form has been to farm down and have a % between 15-20.

Whilst EO. have a very good cash position (£37m at AGM before further Catcher 4 drill programme) , I note proposed Cladhan activity could be 4 wells and SLG have indicated a cost to them of $40m - so EO.'s share will be approx. £11m.

Whilst I am not initially concerned as to the cash position I have no idea what kind of costs would be involved with the above - any ideas ?

sirlurkalot

3rd Feb '11

I've completed selling a large fraction of my holding into today's strength above 145p, and will remain long of Encore but at a modest size. I believe the chances of success of Encore's forthcoming drilling are greater than the sceptics who reckon the shares are overvalued, but nevertheless there is sense in their arguments. Fortunately what appears to be a good selling opportunity has presented itself.

Cash,

That's an interesting thought. There is an extension of JU2 under CN. I hope they give an update on the tertiary before they make a decision whether to drill deeper. As mentioned on the thread this morning with any crew once they have experience of the geology on the structures in question, know what to expect in terms of pore pressure and lithology its easier and quicker to drill. Drill times will come down and costs along with them. They had Vara done dusted, full suite of logs etc within 21 days. I wouldn't argue with the fact that they would have the mud logs with those rumoured oil shows at this stage. Coring and wirelining/MDT would take a few days before drilling ahead. Quite possible, no OWC would be interesting, a dip into the Fulmars may be that bit more interesting. :) We'll just have to wait and see what the company tells us. I don't trade on rumours but I'm a holder here already. :)

Captain Nelson Forties

Well I'm holding mine tight because the recent history on this one suggests a highly positive result and there is so much more to go for. Results are coming faster than expected and there appears to be some leaks forcing the share price higher before the result. Today is day 11 of the drilling programme.

CNF has posted some pretty decent stuff over on ADVFN since the Varadero result. The latest is above.

repo,

I remain long. Just not so outrageously long. It's a matter of position sizes, or repositioning your chips to where you reckon the best opportunities lie. These are the first Encore shares I've sold, and it's been a good multibagging run. Now I've got to deal with the CGT issues...

Hi SirL,

I remain outrageously long and only an enormous success at Quara Dagh and continuing recognition of the value in SLG can, in all probability, hope to return that to just way over the top.

I have absolutely no idea where you're repositioning your chips for better possibilities because you have already told us of your intense dislike for Canadian oilies.

Ik ben benieuwd;-)

repo

peterg

I remain outrageously long and only an enormous success at Quara Dagh and continuing recognition of the value in SLG can, in all probability, hope to return that to just way over the top.

Weeelll, there is another possibility, though I hope for all our sakes it's not what happens :-)

Catcher - further exploration starts

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Doverbeach

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