REG - Reabold Resources - West Newton Flow Rate Update

Reabold ResourcesAnnouncement

17/01/2022 07:05

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RNS Number : 5606Y  Reabold Resources PLC  17 January 2022

17 January 2022

Reabold Resources plc

("Reabold" or the "Company")

West Newton Modelled Flow Rate Potential and Fluid Analysis Update

 

Reabold, the AIM investing Company focused on upstream oil and gas projects,
is pleased to announce initial results of analysis of the West Newton Extended
Well Test ("EWT") programme carried out in the second half of 2021 by RPS
Group ("RPS") and the results of analysis carried out on fluids produced to
surface.

Highlights

·     Independent study by RPS Group* indicates potential for initial
production rates of 35.6 million cubic feet of gas per day ("mmcfd") (5,900
barrels of oil equivalent per day "boepd") from a horizontally drilled well
situated in the gas zone, based on the data from the West Newton A-2 well

·   Study also indicates potential initial production rates of 1,000
barrels of oil per day ("bopd") from a horizontally drilled well situated in
the oil zone, based on well data from West Newton A-2

·     Fluid analysis confirms that hydrocarbon liquids recovered to
surface are low specific gravity, low viscosity, light oil or condensate, and
that gas recovered to surface is good quality with high heat content

 

Independent Review of West Newton Flow Rate Potential

Following the completion of the West Newton EWT in Q4 2021, the project
operator, Rathlin Energy Limited ("Rathlin"), commissioned RPS, a
highly-regarded independent consultant, to produce a review that assessed well
productivity potential from the West Newton field, and investigated optimised
drilling and well completion methodologies.

The RPS review concluded that the Kirkham Abbey reservoir is likely to deliver
substantially higher production rates from horizontal wells compared to
vertical wells.  The report also concluded that, based on RPS modelling, most
of the acid stimulation carried out during the EWT only interacted with a
small section of the perforated intervals due to the permeability contrast
across the Kirkham Abbey formation in both wells. This suggests that potential
flow rates from wells in the Kirkham Abbey reservoir would benefit from an
optimised acid stimulation programme that includes active diversion
techniques.

The analysis was based on a comprehensive suite of data provided from
operations to date at West Newton, including logs, core data, petrophysical
analyses, drilling and completion information, stock tank oil analysis, and
other existing third-party reports.

The RPS review modelled potential flow rates from the Kirkham Abbey reservoir,
assuming horizontal drilling, similar acid concentrations and diluted volumes
per interval as utilised during the EWT operations and an optimised acid-based
stimulation and are as follows:

 West Newton (A-2 Location) Initial 1 Month Average Production Per Day
 Phase  Well and Completion Type                    Average Daily Production
 Gas    Vertical Well Optimised Acid Stimulation    1.8                       mmscfd
 Gas    Horizontal Well Optimised Acid Stimulation  35.6                      mmscfd
 Oil    Vertical Well Optimised Acid Stimulation    64                        bopd
 Oil    Horizontal Well Optimised Acid Stimulation  1,000                     bopd

 

Whilst the well productivity and therefore project economics are significantly
optimised through horizontal drilling, the modelling also indicates that
optimised acidization should lead to both oil and gas flow from vertical
wells.  Therefore, it may be possible to recomplete the existing wells to
achieve sustained flow rates, which would further de-risk and help optimise
subsequent horizontal drilling.

It should also be noted that the RPS modelling does not take into account any
potential contribution to productivity resulting from the natural fracturing
that has been identified within the Kirkham Abbey Formation.  It is Rathlin
management's belief that natural fracturing is likely to be present within
future completion zones, which may further enhance well productivity.

Further evaluation is ongoing to support the economic feasibility of
horizontal wells, including an assessment of longer term production rates.  A
number of additional workstreams and studies are currently underway, and
further announcements are expected in due course.

 

Analysis of Fluids Recovered from the EWT

A number of natural gas and liquid hydrocarbon samples were collected and
analysed from both the West Newton A-2 well and the West Newton B-1z well. The
natural gas had measured specific gravities of 0.63; a methane content of ca
90 per cent. and an ethane content of ca 4.5 per cent.

The liquid hydrocarbons had measured API gravities between 45.9(o) and 49(o)
pointing to a very light oil or condensate. The samples also displayed a low
viscosity measured at between 0.80 centipoise at 40(o) C, 0.91 centipoise at
25(o) C.

 

Stephen Williams, co-CEO of Reabold, commented:

"We are delighted by the findings so far following completion of the EWT,
which demonstrate, as per the RPS Group report, that West Newton could be a
significant hydrocarbon producer.

 

"Following this analysis, we have no doubt that we have a significant resource
in place, and crucially the recovery of what we can now confirm to be high
quality light oil in addition to good quality gas has further de-risked the
project significantly.

 

"The data garnered from the operation has allowed the modelling of potential
flow rates, independently assessed, for the first time, and the results are
extremely exciting.

 

"Further work, including lab-based analysis of the core under reservoir
conditions, is planned and ongoing, which will further inform optimal future
drilling and completion methods at West Newton.  This will feed into our
plans for the next phase of activity at the field, including the potential to
re-complete the existing wells in order to achieve sustained hydrocarbon flow.
We look forward to providing further updates in due course."

 

 

*About RPS Group

 

RPS is a leading global professional services firm. Within the energy sector
and the oil and gas sub-sector, specifically, RPS has a long history of
working on some of the world's most technically demanding oil and gas
projects, both on and offshore. RPS specialises in technical and advisory
services for projects delivered in remote, sensitive and operationally
challenging environments.

 

Qualified Person's Statement

 

Pursuant to the requirements of the AIM Rules - Note for Mining and Oil and
Gas Companies, the technical information contained in this announcement has
been reviewed by Dr Jeremy Jarvis as a Qualified Person. Jeremy has more than
35 years' experience as a petroleum geologist, holds a BSc in Geology from the
University of Dundee and a Ph.D. from Imperial College, University of London.
He is a member of the American Association of Petroleum Geologists and the
Petroleum Exploration Society of Great Britain.

 

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 amended by the Market Abuse (Amendment) (EU Exit)
Regulations 2019. Upon the publication of this announcement via Regulatory
Information Service, this inside information is now considered to be in the
public domain.

 

 

 

For further information, contact:

 

 Reabold Resources plc                                      c/o Camarco

 Sachin Oza                                                 +44 (0)20 3757 4980

 Stephen Williams

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

 James Spinney

 Rory Murphy

 James Dance

 Stifel Nicolaus Europe Limited - Joint Broker              +44 (0)20 7710 7600

 Callum Stewart

 Simon Mensley

 Ashton Clanfield

 Panmure Gordon - Joint Broker                              +44 (0)207 886 2733

 Hugh Rich

 Nick Lovering

 Camarco                                                    +44 (0)20 3757 4980

 James Crothers

 Billy Clegg

 Rebecca Waterworth

 

 

Notes to Editors

 

Reabold Resources plc is an investing company investing in the exploration and
production ("E&P") sector. The Company's investing policy is to acquire
direct and indirect interests in exploration and producing projects and assets
in the natural resources sector, and consideration is currently given to
investment opportunities anywhere in the world.

 

As an investor in upstream oil & gas projects, Reabold aims to create
value from each project by investing in undervalued, low-risk, near-term
upstream oil & gas projects and by identifying a clear exit plan prior to
investment.

 

Reabold's long term strategy is to re-invest capital made through its
investments into larger projects in order to grow the Company. Reabold aims to
gain exposure to assets with limited downside and high potential upside,
capitalising on the value created between the entry stage and exit point of
its projects. The Company invests in projects that have limited correlation to
the oil price.

 

Reabold has a highly-experienced management team, who possess the necessary
background, knowledge and contacts to carry out the Company's strategy.

 

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