7th Jul 2014 07:58
LONDON (Alliance News) - Faroe Petroleum PLC Monday said the Butch South West exploration well 8/10-6S in the Norwegian North Sea has drilled to its target depth, finding a good quality reservoir but without any hydrocarbons.
The oil and gas exploration company said that Butch South West exploration well will now be plugged and abandoned, meaning that both the eastern and south western flanks of the Butch Main oil discovery have failed to add further resources.
The Butch licence is owned and operated by Centrica PLC, which has a 40% stake, while Faroe has a 15% stake, Tullow Oil Norge AS, a subsidiary of Tullow Oil PLC, also has a 15% stake, and Suncor Norge AS holds the other 30%.
The south west exploration well started drilling in early June, reached a total depth of 1,945 metres and targeted sandstones in the upper Jurassic reservoir of the Ula formation of the region. It found a 55 metre reservoir space but no hydrocarbons.
During May, Faroe said its 8/10-5S exploration well and 8/10-5A appraisal wells in the eastern flank of the Butch discovery had failed to find hydrocarbons.
The Butch discovery itself was made in December 2011, with preliminary estimates of between 30 to 60 million barrels of light oil equivalent from the site.
Centrica is currently working on a development plan for the Butch Main discovery, with concept selection expected in early 2015.
"Whilst it is disappointing that the eastern and south western flanks of the Butch salt structure have not added further resource, the focus of the joint venture is now turning to commercialising the Butch Main oil field. Plans to develop Butch Main are already advanced and we look forward to reporting further progress on this important oil field in the coming months," Faroe Petroleum Chief Executive Officer Graham Stewart said in a statement.
Tullow Oil shares were down 1.3% to 833.00 pence, making it the second biggest FTSE 100 faller during early trading on Monday, whilst, on AIM, Faroe Petroleum shares were down 1.8% to 122.74 pence. However, Centrica shares were up 0.2% to 315.20 pence.
By Tom McIvor; [email protected]; @TomMcIvor1
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