REG - Beacon Energy PLC - Schwarzbach-2(2.) Well Update

Beacon EnergyAnnouncement

18/08/2023 07:00

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RNS Number : 7622J  Beacon Energy PLC  18 August 2023

18 August 2023

Beacon Energy plc

("Beacon Energy" or the "Company")

Schwarzbach-2(2.) Well Update

 

Beacon Energy (AIM:BCE), the full-cycle oil and gas company with a portfolio
of production, development, appraisal and exploration onshore German assets
through its wholly-owned subsidiary, Rhein Petroleum GmbH ("Rhein Petroleum"),
announces an update on the Schwarzbach-2(2.) ("SCHB-2(2.)") well.

Summary:

·   The SCHB-2(2.) well has encountered good quality oil-bearing reservoirs
in the Meletta-Schichten ("Meletta") sandstones and the
Pechelbronner-Schichten ("PBS") sandstones within the Stockstadt Mitte segment
of the Erfelden field.

·   An electric wireline logging programme has been completed and initial
analysis shows good quality oil-bearing reservoirs with porosity ranges above
pre-drill expectations.

·   Initial evaluation of the logs over the PBS indicates a 34-metre gross
interval containing 28 metres of oil-bearing net reservoir, with porosities
averaging 18% and up to 28%, all of which significantly exceed pre-drill
estimates.

·   These oil-bearing reservoirs were encountered approximately 25 metres
higher than prognosis with oil observed on the shale shakers and in the mud
pit whilst drilling these intervals.

·   No water-bearing sands were encountered in the Meletta or the PBS
intervals.

SCHB-2(2.) electric wireline well logging results

The SCHB-2(2.) well reached total drill depth of 2,255m metres (1,717 metres
True Vertical Depth) on 13 August 2023. This well was drilled to target
hydrocarbons in the undeveloped Stockstadt Mitte segment of the Erfelden
field, with 2P oil reserves of 3.784mmbbls assigned to this segment from the
independent Competent Person's Report ("CPR") published by the Company in
December 2022.

The electric wireline well logging has now been conducted in the well and is
interpreted to have encountered good quality oil-bearing reservoir in the
Meletta and the PBS reservoirs with porosity ranges above pre-drill
expectations.  The initial evaluation of the logs over the PBS indicates a
34-metre gross interval containing 28 metres of oil-bearing net reservoir,
with porosities averaging 18% and up to 28%, all of which significantly exceed
pre-drill estimates.

The target reservoirs were encountered approximately 25 metres higher than
prognosis and oil was seen on the shale shakers and in the mud pit whilst
drilling these intervals. No water-bearing sands were encountered in any of
the target reservoirs.

The thicker oil-bearing net reservoir and higher range of porosities are
better than pre-drill expectations and, in combination with the shallower
target depth, have positive implications for both the reserves description and
the future cash generative potential of this segment of the Erfelden field.

The operating team will now undertake reservoir clean-up, production testing
and install the production liner to bring the SCHB-2(2.) well into production
through the existing Schwarzbach facilities which are owned and operated by
the Company. The expectation is that this production will be brought onstream
over the next month.

The Company expects to provide a further update on progress of the SCHB-2(2.)
well after undertaking the reservoir clean-up operation and production
testing.

Beacon Energy Chief Executive Officer, Larry Bottomley commented:

"The SCHB-2(2.) well has now been safely, effectively and successfully drilled
and logged, a testament to the quality of the Rhein Petroleum operating team
who delivered a positive outcome despite encountering certain technical
challenges through the drill. The well has encountered oil bearing reservoir
in the Meletta and PBS sandstones, both shallower than predicted with the PBS
being a thicker interval with more sand and of better quality than pre-drill
estimates. These results imply significant upside to the reserve range
assigned to the Stockstadt Mitte segment in the CPR published by the Company
in December 2022, and this will be the focus of one of the post-well projects.

"The electrical wireline logs demonstrate that this well has the capacity to
materially increase the Company's production and revenue as the well is
brought onstream through our wholly-owned and operated existing facilities.
This is a very important step in the Company's aspiration to build a
self-funding platform for growth.

"In addition, the data provided from the SCHB-2(2.) well will help to de-risk
the 2C contingent resources of 2.4mmbbls assigned to the adjacent Schwarzbach
South segment which will be targeted during the further development of the
Erfelden field.

"The operations team will now focus on completing the well for production and
we will update the market as appropriate".

 

Enquiries:

 Beacon Energy plc                                        +44 (0)20 7466 5000

 Larry Bottomley (CEO) / Stewart MacDonald (CFO)

 Strand Hanson Limited (Financial and Nominated Adviser)  +44 (0)20 7409 3494

 Rory Murphy / James Bellman

 Buchanan (Public Relations)                              +44 (0)20 7466 5000

 Ben Romney / George Pope

 Tennyson Securities Limited (Joint Broker)               +44 (0)20 7186 9030

 Peter Krens / Ed Haig-Thomas

 Optiva Securities Limited (Joint Broker)                 +44 (0)20 3411 1881

 Christian Dennis

 

For further information, please visit  www.beaconenergyplc.com
(http://www.beaconenergyplc.com)   and @BeaconEnergyPlc on Twitter

To register for Beacon Energy's email alerts, please complete the following
form:  https://www.beaconenergyplc.com/media-centre/news/#alerts
(https://www.beaconenergyplc.com/media-centre/news/#alerts)

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018.

Technical Standard

The technical information in this announcement has been prepared under the
PRMS - Petroleum Resources Management System created by the Society of
Petroleum Engineers, a global standard of petroleum reserve and resource
classification together with guidelines and accepted methodologies for the
definition and estimation of petroleum resources and their monetary valuation.

Qualified Person's Statement

Mr Larry Bottomley, CEO at Beacon Energy, has reviewed and approved the
technical information contained within this announcement, in his capacity as a
qualified person, as required under the AIM rules. Mr Bottomley has over 40
years' experience in the oil & gas industry, prior to which he studied
Geology (BSc.) at Imperial College, University of London, followed by
Stratigraphy (MSc.) at Birkbeck College, University of London.

About the Erfelden Field

The Erfelden oilfield is the most northern oil field in the Upper Rhine
Graben and is comprised of four juxtaposed structural segments: the mainly
depleted Kuehkopf segment, the producing Schwarzbach Main segment, the
Stockstadt Mitte segment which is the focus on the current development
programme and the unproven Schwarzbach South segment.

 

The westerly Kuehkopf segment was discovered by Exxon and produced oil between
1956 and 1985, who also operated the adjacent Stockstadt field. Both
accumulations were discovered, appraised and developed from the subsurface
description from legacy 2D seismic data.

 

Rhein Petroleum (a wholly-owned subsidiary of Beacon Energy) subsequently
secured the licence (Operator, 100%) and acquired an extensive 3D seismic
survey which led to the discovery of the Schwarzbach Main segment in 2015 when
the Schwarzbach-1 well (SCHB-1) discovered oil in the Oligocene
Pechelbronner-Schichten ("PBS") sandstones in a North-South trending
structural high at northern end of the Erfelden Field. The Schwarzbach Main
segment is still producing light oil (37-38(o) API) from the SCHB-1a well
through the Schwarzbach Production facility.

 

The Schwarzbach-2(2.) development well (SCHB-2(2.)) has now proved the
commercial potential of this segment. The independent Competent Person's
Report published by the Company in December 2022 assigned 2P reserves of
3.784mmbbls to the Stockstadt Mitte segment.

 

The development plan for the Stockstadt Mitte segment envisages 3 wells - the
SCHB-2(2.) production well and subsequently an additional 2 wells; a producer
and a water injector. The aim is that these additional wells will be drilled
funded from the free cash flow generated by production from the SCHB-2(2.)
well.

 

The drill pad for these 3 wells was prepared immediately adjacent to the
Schwarzbach Production facility, which is wholly-owned and operated by the
Company, and conductor pipes for each of these wells were set to a depth of
85m below ground level. A flowline from the drilling pad to the Schwarzbach
Production facility will allow tie-back and hook-up as these wells are
completed and put into production.

 

The Schwarzbach South segment is undrilled, with the 2C Contingent Resources
of 2.4mmbbls described in the CPR now significantly de-risked by the results
of the SCHB-2(2.) well. This forward plan is that this segment will be the
target of future drilling.

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