Dana Investment Programme

Tuesday, May 12 2009 by
5

NO TA ON THIS THREAD PLEASE

With the AGM only three weeks away now and the usual "close to the chest" approach being followed prior to revealing their drilling plans at the AGM, it is interesting to see the following comment: http://www.upstreamonline.com/live/article178252.ece

UK-based producer Dana Petroleum said it plans to invest $130 million in Egypt this year.  "It's considered our largest investment," Stuart Paton, the company's technical and commercial director, told Reuterswithout giving details of how the money would be spent.  "That is about 35% of our total group investment internationally. We have about 25% of our production here in Egypt," Paton added.

In addition to the earlier wells in the Gulf of Suez (South October and South East July), there are other wells planned in that area but, perhaps more importantly, there are also two wells planned on West El Burullus [offshore from the Nile Delta] where they made a decent gas find in June 2008 on the KES-CC1 prospect. Pre-drill KES-CC1 was reckoned at 375bcf and, IIRC, the well was considered to be indicative of rather better than that (though was constrained by equipment). They have a further 1.5 TCF of potential targets in the pliocene, close to KES-CC1 and there is a deeper horizon that has potential....... so, the WEB wells in Egypt have the potential to be very interesting in coming months.

But that's not all! The long-awaited Tornado prospect off Shetland is also now only a few months from getting drilled (and that is considered to be 90-100mn bbls pre-drill) and the Trolla prospect in the Norwegian North Sea isn't far behind  - and that is reckoned to be 240mn bbls P50 pre-drill. Trolla is due to spud in August: http://www.investegate.co.uk/Article.aspx?id=200903300700166771P and the Eitri well (also in Norway on Jotun) spudded last month.

So - watch this space for more news on the drilling upside following the AGM (on 1st June). I suspect it might be a rather interesting programme.

ee

 


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95 Posts on this Thread show/hide all

emptyend 2nd Nov '09 76 of 95
5

OK......looking ahead into 2010 (leaving the important Egypt programme on one side for now), I wonder what the prospects are for the Anne-Marie well?

This seems to be scheduled for Q2, with either the West Alpha rig or the West Phoenix....depending which source one uses. Anne Marie is a 4 way dip structure which is allegedly analogous to the Rosebank find (though it is nearer Tornado than Rosebank).....

....but, more interestingly, it seems to be very large, according to these comments:

Anne-Marie, one of several structural prospects on the license, is a four-way dip closure on a large pre-Tertiary high. It has the potential for stacked reservoirs, with two primary targets in the Eocene T50 and Paleocene T36 and four secondary targets. Mean oil in-place estimates for the two primary targets are in excess of 600 MMbo, and for the secondary targets between 500 and 2,000 MMbo. The Anne-Marie well has a projected total depth of 3,900m in 1,250m of water. License 005 is on a prominent structural trend offsetting the highly prospective Corona Ridge, which contains both the Rosebank/Lochnagar and Cambo/Lindisfarne discoveries.

 Dana has farmed-in for a 25% stake - and Faroe Petroleum has a further 12.5%.....so this is probably the biggest well in Dana's programme for 2010, targetting up to 200mmboe+ of net reserves (up to 2.6bn bbl OOIP gross)

However, equally interestingly, Tom Cross appears to be more cautious re the size (despite the fact that the structure is plainly very much larger than Tornado on his own graphics - and would seem to be stacked plays too)

“The discovery also bodes well for the nearby Anne Marie prospect in Faroese waters, which we believe is a similar size to Tornado.”

Further details here from ENI, for the keen geologists amongst you:

The Anne-Marie prospect in Licence 005 comprises a structural trap with four-way dip closure and

the potential for multiple stacked Eocene and Paleocene reservoirs. Eni and partners plan to drill

the prospect in spring 2010. Recent drilling activity in the Faroese offshore (6104/21-1 and

6005/13-1A wells) has yielded unexpected results, mainly with regard to a much thicker than

predicted Paleocene Basalt Series. These results, coupled with the recent release of data for wells in

the UK sector of the Faroe-Shetland Basin resulted in Eni re-examining the Basalt Series and

deeper section in Licence 005.

Licence 005 is located over an east-west trending gravity modelled high which separates the Judd

sub-basin to the south from the Corona sub-basin to the north. Interpretation of the deep structure

that gives rise to the high is hampered by poor seismic imaging related to the late Paleocene Basalt

Series and to the occurrence of sills and increased structural complexity below the basalt sheet.

Well control and seismic data indicate that the Paleocene section below the Basalt Series is much

thicker in the Judd sub-basin than in the Corona sub-basin. Three structural models have been

considered to explain the deep structuration running through Licence 005: (1) a horst with

predominantly north-south extension, (2) a transfer zone with predominantly east-west extension

and (3) a wrench with predominantly east-west strike-slip movement. The favoured model is that

which involves a transfer zone located south of the Anne-Marie prospect.

The Anne-Marie prospect lies near the edge of the Faroese basalt sheet, in a similar setting to the

recent 213/27-1z Rosebank intra-basalt oil and gas discovery. A relatively good seismic character

correlation between the Basalt Series in the two areas suggests the potential for an intra-basalt play

at Anne-Marie.

Faroe Petroleum also call the structure "very large" in their interims:

The third exploration  well scheduled  to be drilled  in the  current
campaign is the  Faroese Anne Marie  exploration well (Faroe  12.5%).
This significant oil prospect is scheduled to be drilled by operator
ENI in 2010 using the contracted West Phoenix drilling rig.  The Anne
Marie exploration well is designed to test multiple objectives.  This
target is particularly  exciting as  it shares  a similar  geological
setting to that of Chevron's significant Rosebank oil discovery,  and
like Rosebank, is potentially a very large structure.

Could be an interesting time over the next 6 -8 months.......  ;-)

ee

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emptyend 2nd Nov '09 77 of 95
4

In reply to emptyend (post #75)

Broker note (Citi) quoted here suggests that Tornado could be up to 70% gas (say two-thirds ish) and slightly smaller than 90mmboe....so 50mmboe of gas perhaps, but maybe more like 30mmboe or so of oil? Obviously the figures are still being fine-tuned and the commerciality isn't yet a gimme (though I believe they think it will be commercial - even if they haven't "quite" worked out how best to do it). Likely to be co-dependent on other fields in the area?

ee

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oilretire 3rd Nov '09 78 of 95
5

In reply to emptyend (post #77)

Should be an easy option to make Tornado part of a tie back development to Schiehallion in conjunction with the as yet to be developed Suilven field.

http://www.faroe-petroleum.com/get.file?ID=2707

http://www.oilport.net/news/art.aspx?Id=15129

Tornado is 10 km (6.25 miles) northwest of the Suilven oil discovery and 30 km (18.75 miles) north west of the Schiehallion field location – putting it within tieback distance of that BP FPSO infrastructure.

Incidently all these potential tie backs become a bit easier to plan in if the plans I am picking up on are sanctioned. The FPSO is to be replaced - a combination of the vessel having some integrity issues that will not see out end of field life, in fact no where near it with reserves upgrades due to enhanced oil recovery plans for the existing producing fields & of course all the near field potential.

And all that was set in motion long before last months incident that shutdown Schiehallion, which is still shutdown.

http://www.oilport.net/news/art.aspx?Id=15125

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doverbeach 12th Nov '09 79 of 95

Jetta RNS

They have drilled the side track and thngs still aren't conclusive:

The primary exploration target for these two wells [Jetta and the sidetrack]  was to prove the presence of petroleum in Paleocene age reservoir rocks. Oil was proven in both wells, but with less reservoir thickness than prognosed. Extensive data has been gathered in the reservoir zones, including pressure tests and oil samples. Given the close proximity of the Jetta oil discovery to existing oil producing infrastructure, further work needs to be carried out to evaluate the commerciality of the Jetta accumulation in conjunction with other fields.

db

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marben100 12th Nov '09 80 of 95
1

The bit I missed on a quick first read was:

Well 25/8-17 was drilled to a vertical depth of 2208 metres below sea level and was concluded in the Rogaland Group of Paleocene age. The sidetrack well, 25/8-17 A, was drilled to a vertical depth of 2154 metres and was also concluded in the Rogaland Group, both these exploration wells will be permanently plugged and abandoned as planned.

[my bold]

Not exactly encouraging. Dana hasn't been improving its explo reputation recently.

Regards,

Mark

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tournesol 12th Nov '09 81 of 95
6

Morning Mark

IMHO you are being a little negative about the P&A decision.

Some years back I worked on a cost reduction exercise for a major active in the N Sea and elsewhere.

It was commonplace for them to conclude exploration/appraisal drilling by installing temporary well closures on the basis that a decision might be taken later on to re-enter the well.

Many/most times they decided not to re-enter the well and had to go back, relocate it (sometimes under a layer of silt), remove the temp closure and do a permanent close.

When we analysed it we found that it would actually be cheaper for them to switch to a default action of doing a P&A - except in exceptional circs. Of course that meant that they sometimes lost the opportunity to reuse a well and had to drill a new one from scratch but given the %'s it meant they saved a very large amount of money.

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emptyend 12th Nov '09 82 of 95
3

In reply to marben100 (post #80)

Just to be clear - the two wells being referred to are Jetta and the sidetrack.....not two additional wells!

http://www.npd.no/en/news/Exploration-drilling-results/2009/258-17-and-258-17-A/

There is, of course, nothing unusual in P&Aing exploration wells unless they have clearly commercial flow rates (which is rarely the case), in which case they are usually suspended as potential producers.

As you say, the Norwegian programme has been somewhat underwhelming this year - though it must surely be the case that a small discovery is better than a dry hole!

ee

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sirlurkalot 12th Nov '09 83 of 95
1

Is there any kind person out there who could email me a pdf copy of the Dana AGM drilling schedule, to my usual yahoo emailbox?  Well the whole AGM presentation would actually be nice if anyone has it on pdf!  Do I remember reading that it's on their website?  Well I can't find it...

Many thanks in advance!

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emptyend 12th Nov '09 84 of 95
1

In reply to sirlurkalot (post #83)

The AGM drilling schedule isn't very helpful at this point. Only the three Egyptian wells on it are yet to have results - and it doesn't go beyond November! The main thing to note is Anne-Marie (for which see my previous comments on timing, size etc)!!

As to the market reaction today, I'm bound to wonder whether some people have got their Danas confused!! Dana Petroleum has drilled a couple of wells that may yet turn out to be value-accretive. Dana Gas, OTOH, has announced losses and write-offs associated with THEIR wells in Egypt!.....

Seems odd that Dana Petroleum has fallen by more than Dana Gas!!  ;-)

ee

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marben100 12th Nov '09 85 of 95
2

Hi SirL,

PDF copy? Available on website? Surely sir, you jest? ;0)

I do, however, have a paper copy and am happy to post a quick run-down of what appear to me to be the major events:

  • Rinnes development drilling due to start any time now
  • Papyrus & Bamboo in WEB due any time now
  • Anne Marie down for Q3 2010

Dana's IMS is due any time now, so maybe we'll get an update in that.

We also know that work at Tornado is ongoing...

Perhaps someone else that was at the AGM can pick me up on any other biggies I've missed (within the next 6 months or so).

Regards,

Mark

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sirlurkalot 12th Nov '09 86 of 95

Thanks for replies.  Is the grey pic with white text at the bottom of http://www.dana-petroleum.com/Operations/exploration_programme.htm the best available at the moment, subject to the comments just above?  Or is there some more detailed/future version officially available?

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SW10Chap 12th Nov '09 87 of 95

In reply to sirlurkalot (post #86)

is there some more detailed/future version officially available?

The Interims report from 28 Aug (on Dana's site here) has a few paragraphs on Exploration and Appraisal which is probably a little more up-to-date. I don't know if that's more or less than you may already have?..

SW10

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emptyend 12th Nov '09 88 of 95

In reply to marben100 (post #85)

Mark,

Anne Marie down for Q3 2010

I believe this is no longer the case. See post 76 above. There are a number of sources pointing to a spud in March/April, including http://www.asb.fo/ ....and you can see that the reference to drilling a well for TOTAL first ties in with where the rig now is: http://www.rigzone.com/data/rig_detail.asp?rig_id=1355 ....drilling a well for TOTAL off Norway. The NPD reported in mid-September that the rig was headed there:

West Phoenix, which will proceed to production licence 043 in the North Sea to drill a development well with exploration target 30/4-D-1 AH where Total E&P Norge is the operator.

I'd guess you won't have to take my word for it though - the IMS should be due shortly and I'd think will confirm the forward programme. The important bit though will be to consider the potential size of Anne Marie (per post 76). [Edit: in fact my notes of the AGM say that Anne Marie was scheduled for Q2 2010 as the 6th well in an ENI-operated programme]

Coincidentally, we're expecting to be visited for the first time at Christmas by my American niece named Anne Marie.....I'm hoping its a good omen! ;-)

ee

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marben100 12th Nov '09 89 of 95

Hope you niece is a good omen too, ee. :0) Thanks for that. About time we had another unequivocally good result. Papyrus/Bamboo would do nicely in the meantime. Maybe some good news to come from Tornado.

I've added a few more at today's prices.

Cheers,

Mark

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emptyend 19th Nov '09 90 of 95
6

IMS out today

Relevant points include:

Dana is currently drilling the Papyrus exploration well, on the West El Burullus concession, (Dana 50%) offshore Nile Delta, Egypt, targeting gas at a similar horizon to the West El Burullus-1 discovery made in 2008.  The well is expected to complete around year end and its key aim is to prove additional gas volumes in this area in order to optimise development planning. An exploration well on the much larger Bamboo prospect, is due to spud following completion of Papyrus, and will target deeper, high pressure gas reservoirs which have the potential to open up significant further prospectivity in the block.

note that this is right next to the BP HPHT acreage and that Bamboo is potentially 0.5 TCF.....with further HPHT deep gas potential on the block.

Dana's working interest production for the year to date has averaged approximately 38,200 barrels of oil equivalent per day ("boepd"), with production levels over the past three weeks averaging in excess of 42,000 boepd. 

This is obviously lower than previous expectations, mainly due to Ettrick infrastructure issues and low gas demand levels.

On the Western Isles Project in the UK Northern North Sea work continues at pace. A preferred development concept will be selected early in 2010, with project sanction planned for Q3 2010 and first oil by Q4 2012.

This is the Rinnes/Melville area development - in case anyone has forgotten the renaming. Would be interesting to know what sort of production numbers they think it will deliver.....

In 2009, Dana now expects to drill a total of 18 exploration wells. The exploration programme for 2010 will be refined over the coming weeks and will reflect rig availability and discussions with co-venturers. Key wells already scheduled for early in 2010 are targeting large prospects at Bamboo, offshore Nile Delta, Egypt, and at Anne Marie in the Faroe Islands.

On looking back at my AGM notes, I see that Anne Marie was expected to be pushed back from February to May 2010, being the 6th and last well in the ENI programme instead of the 4th as originally-planned. I assume this is still the case, though perhaps it will become completely clear when they have finished planning.

ee

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oilretire 8th Jan '10 91 of 95
4

In reply to oilretire (post #78)

re earlier discussions on possible options for Tornado development and the comments I made regarding replacement of the Schiehallion FPSO - Upstream newspaper is covering the story today.....

http://www.upstreamonline.com/live/article203036.ece?

UK supermajor BP is homing in on a newbuild floating production, storage and offloading vessel to redevelop its Schiehallion oilfield on the UK Atlantic Margin and will be visiting shipyards within weeks for further talks

 

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emptyend 10th Feb '10 92 of 95
4

Gas & condensate discovery at Papyrus in Egypt:

A multi-rate drill stem test has been completed. The well flowed at rates of up to 33 million standard cubic feet per day with 442 barrels of condensate per day. The flow rates during the test were constrained by the drill stem test equipment and it was very encouraging that downhole pressures remained high during the flow test.

The data will now be fully analysed and the commerciality of this discovery, along with the previous WEB-1X discovery, will be discussed with EGAS. Dana and GDF Suez are currently evaluating concepts that would enable a combined early development of these two neighbouring gas discoveries.

The Papyrus-1X well is being suspended for potential re-entry and future use as a gas production well. The drilling rig will then immediately move onto the Bamboo prospect in the same concession area. Bamboo is a large, Miocence channel and it is expected to take approximately 90 days to drill to top reservoir.

Must derisk a chunk of other prospects in the area too.....

ee

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oilretire 20th Mar '10 93 of 95
3

Good news for all West of Shetland explo companies..........

Major new infrastructure gets the final go ahead

http://energy.pressandjournal.co.uk/Article.aspx/1655004

It emerged on Thursday that French energy giant Total, in partnership with Denmark’s Dong Energy, had finally struck a deal with Shetland councillors allowing work to start on the new processing plant at Sullom Voe......

Laggan/Tormore will be connected via a subsea pipeline to a gas-processing plant at Sullom Voe, with further export of processed gas to the UK Frigg pipeline system in the North Sea and on to the St Fergus terminal.


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emptyend 15th Apr '10 94 of 95
1

In reply to emptyend, post #76

On Anne Marie, see a fuller description of the prospects here:

http://www.stockopedia.com/content/re-analyst-coverage-and-related-media-comment/29834?comment=30#30

[cross-posted for completeness]

ee

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ignatius 11th May '10 95 of 95
3

In reply to oilretire, post #93

They broke ground a couple of days ago;

http://www.laggan-tormore.com/news2.cfm?news_ID=42

(wish me luck, I've got an interview for this project later in the week)

ignatius

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