REG - Beacon Energy PLC - Schwarzbach-2 Development Well Rig Contracted

Beacon EnergyAnnouncement

11/04/2023 07:15

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RNS Number : 6816V  Beacon Energy PLC  11 April 2023

11 April 2023

Beacon Energy plc

("Beacon Energy" or the "Company")

Schwarzbach-2 Development Well Drilling Rig Contracted

 

Beacon Energy (AIM:BCE) is pleased to announce that its wholly-owned
subsidiary, Rhein Petroleum GmbH, has contracted a fully-crewed drilling rig
from RED Drilling & Services GmbH ("RED Drilling") for the planned
Schwarzbach-2 ("SCHB-2") development well within the Erfelden Field, onshore
South West Germany.

The rig is expected to mobilise in early-June 2023 targeting a mid-June spud.
Drilling operations are expected to take 25 days to reach the prognosed TD
drilling depth of 2255m (1709m True Vertical Depth), with an additional 12
days scheduled for testing. The drilling pad has been prepared and the 20"
conductor pipe has been set at 85 metres.

 

It is anticipated that once completed, the SCHB-2 well will be tied-in to
existing production facilities at the Schwarzbach site which will take
approximately 12 days to complete.

 

 

Larry Bottomley, Chief Executive Officer of Beacon Energy, commented:

 

"I am delighted that we have been able to secure this high quality rig so
swiftly after completing our  acquisition of Rhein Petroleum and readmission
on to AIM. This well is the first of potentially four development wells to be
drilled at Erfelden over the next 2 years and is the next step in delivering
the self-funding business model created by the acquisition of Rhein Petroleum.

 

To re-emphasise the highly value accretive nature of the transaction we
recently concluded with Rhein Petroleum, the funds we raised to complete the
deal will be used to drill SCHB-2 well which represents a material value
catalyst for Beacon.  In the success case, this well will deliver a
step-change in production and cashflow which will enable the Company to fund
further value enhancing activity across the portfolio.  We look forward to
providing further updates on SCHB-2 as we near the spudding of the well in the
coming months."

 

 

 

Enquiries:

 Beacon Energy plc                                        via Buchanan

 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 / Jon Krinks

 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)

 

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 depleted Kuehkopf
segment, the producing Schwarzbach Main segment, the discovered Stockstadt
Mitte segment 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 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 API) from the
SCHB-1a well through the Schwarzbach Production facility.

 

The Schwarzbach-2 development well (SCHB-2) is targeting the Stockstadt Mitte
segment which was proven by the Stockstadt Mitte-1 well (SK-M1), drilled by
Exxon in 1986. This well encountered oil in the PBS sandstones and in the
shallower Meletta-Schichten sands (ME). 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 production well to be drilled in the next few months and subsequently
an additional 2 wells; a producer and a water injector. The aim is that these
additional wells will be drilled over the course of the next 18 months funded
from the free cash flow generated by production from the SCHB-2 well.

 

The drill pad has been prepared immediately adjacent to the Schwarzbach
Production facility and 3 conductor pipes have been set to a depth of 85m
below ground level. A flowline from the drilling pad to the Schwarzbach
Production facility has been installed to facilitate tie-back and hook-up as
these wells are completed and put into production.

 

The Schwarzbach South segment is undrilled, with 2C Contingent Resources of
2.4mmbbls described in the CPR. This segment will be the target of future
development drilling.

 

About RED Drilling

RED Drilling & Services GmbH owns two fully equipped Bentec rigs which are
rated up to 300 metric tonnes hookload and which are capable of drilling wells
up to 5500m deep. Further information on RED Drilling can be found at:
https://www.red-drilling-services.at/en
(https://www.red-drilling-services.at/en)

 

 

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.

 

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