EnCore Oil cheers results from Cladhan appraisal well

Tuesday, Aug 31 2010 by
3
EnCore Oil cheers results from Cladhan appraisal well

Oil and gas group Encore Oil (LON:EO.) this morning reported that an appraisal well drilled into its Cladhan discovery in UK Northern North Sea block 210/29a had delivered results at the upper end of expectations. A discovery was first made at Cladhan in December 2008 and the follow up well aimed to refine the range of oil volumes by gaining a better understanding of the distribution and thickness of the Upper Jurassic reservoir sands.

The appraisal well was drilled to a total measured depth of 11,215 feet, as a side-track into the Upper Jurassic channel sands, approximately 3,150 feet to the south of the original Cladhan discovery. The side-track encountered excellent quality oil bearing sandstones, resulting in a gross hydrocarbon column of 159 feet with 102 feet of net hydrocarbon pay. The sandstone has average porosity of 21% and average oil saturations of 86%. No oil water contact has been observed.

Modular Dynamic Test sampling for both formation pressures and oil samples indicate good correlation of both oil type and reservoir pressure with the 2008 discovery well. The original discovery well and this side-track have together confirmed a total hydrocarbon column in excess of 273 feet. Drill stem testing will now be performed after which the next phase of the appraisal programme will be to drill a second side-track down dip of the original discovery well in order to confirm the extent of the reservoir and seek to establish the oil water contact.

Alan Booth, EnCore’s chief executive, said: “This is a superb result from Cladhan and is at the upper end of our expectations regarding the quality and quantity of reservoir sands. This result supports the idea that Cladhan is a significant stratigraphic trap which has still not encountered an oil water contact. We look forward to the results of the testing and the second side-track in order to help us determine the oil water contact and thus the extent of Cladhan. Only once this information is to hand will we be able to determine the relevant development options of Cladhan and provide an informed estimate of the potential size of the field.”

Booth said that aside from the exceptional result at Cladhan, EnCore was hopeful of returning to Catcher this autumn, dependent on the signing of a suitable rig contract which is nearing agreement, but not yet confirmed. The group…

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11 Comments on this News show/hide all

ohisay 1st Dec '10 1 of 11
2

Interesting comments from VPP this morning in its operational update.

http://www.investegate.co.uk/Article.aspx?id=201012010700081215X

Valiant has identified the South Cladhan leads in Blocks 210/29c and 210/30b (Valiant; 100%, operator) which are believed to be an extension of the Cladhan channel-sand play which was discovered immediately to the north of Valiant's acreage in 2009 by Sterling Resources Ltd and successfully appraised earlier this year.

It is anticipated that a well will be drilled into this block during the second half of 2011 following the drilling campaign on the Cladhan discovery to the north during Q1 2011. Valiant is currently in advanced discussions with various parties regarding potential transactions on South Cladhan and will update the market in due course.

 

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REO100 1st Dec '10 2 of 11

I might be way of track as SLG have their hands full with a number of projects/financing them, but could they be one of the interested parties having extensive knowledge already ?

Reo

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ohisay 1st Dec '10 3 of 11

In reply to post #51036

Advanced discussions with "various parties."

Sounds to me like not just SLG but potentially Wintershall too.


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repobear 1st Dec '10 4 of 11
3

In reply to post #51042

Not a bad little company ..........for now;-)

http://www.wsw.com/webcast/canaccord3/slg.cn/

Of interest to Encore holders 45-50 % recovery rates for Cladhan mentioned in a very upbeat sounding statement of what the future may hold for those with a bit of Cladhan. My expectations that the appraisal programme could well take a long time pretty much confirmed.

Some nice numbers in there for Cladhan too, though nothing new, except confirmation of  recovery rates that I had read across from simllar structures.

My take on Cladhan south....for now.

http://boards.fool.co.uk/hi-tgg-yeah-that-would-be-nice-but-its-a-big-if-12110608.aspx

repobear

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ohisay 1st Dec '10 5 of 11
3

In reply to post #51070

Hard not to be impressed by the SLG presentation isn't it.
In fact the more I think about it it seems churlish not to have some kind of position with SLG .

Given that its also isable I've recently slightly reduced my Encore position (for three reasons*) and today set aside the equivalent cash to invest in SLG.
*1.I'm overweight anyway .
 2.I don't see Catcher drilling any time soon given the weather window- leaving me the option to buy back if the current Euro/Korean nonsense sends it seriously pear shaped .
 3.I'm not entirely convinced going west with Catcher will vindicate the current Encore valuation whereas the Cladhan outlook looks about as open ended as one could wish .If thats the case I should be with SLG.

PS Looking at VPPs estimates of the P50 resource in the Southern Cladhan area I'm reminded of how I dismissed the Catcher drill because of the pre drill estimates .The more I see of pre drill estimates and COS for specific wells the more I think its like fingers pointing to the moon.

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DeeKay 3rd Dec '10 6 of 11

I don't believe Sterling Resources is isable as it does not have a UK listing on LSE or AIM. I tried to buy shares for a SIPP and was firmly turned down as well!

So if anyone knows a way to ISA/SIPP I would be very interested :-)

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peterg 3rd Dec '10 7 of 11
2

In reply to post #51132

Hi DK,

SLG is ISAble. It has a full listing on a recognised stock exchange (Toronto Venture), which is all the HMRC require. What your broker requires is another matter. I cannot hold SLG in my Barclays ISA, but both my Selftrade and iDealing ISAs allow it. No idea about SIPP rules.

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fuiseog 3rd Dec '10 8 of 11

I hold SLG, please don't tell repobear -:), in both a Selftrade ISA and Sippdeal sipp.

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maffs0 3rd Dec '10 9 of 11

DeeKay,

I have some SLG in both my Isa and SIPP with iDealing.

M.

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ohisay 4th Dec '10 10 of 11
2

In reply to post #51132

I've mine with Hargreaves Lansdowne.

Incidentally there is a very good thread on Advfn which lists (UK listed) commodity shares which are isable.

http://www.advfn.com/cmn/fbb/thread.php3?id=21500476

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DeeKay 6th Dec '10 11 of 11

Thanks for the information. My Sipp is with T D Waterhouse (who took over the eTrade Sipps). I will have another discussion with them.

The key question will be on timing now as I would aim to buy on dips to the $3-ish mark. Anyway as this thread is on Encore, that's for another place.

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