11th Jul 2022 17:45
(Alliance News) - Harbour Energy PLC said Monday it was "encouraged" by the drilling results from a well offshore Indonesia, but Berenberg said the commerciality of the well remains "uncertain".
The Timpan-1 exploration well, 150 kilometres offshore Indonesia, was drilled to a total vertical depth of 13,818 feet subsea.
"The well encountered a 390 foot gas column in a high net-to-gross, fine-grained sandstone reservoir with associated permeability of 1-10 millidarcy," Harbour explained. "While the well has encountered a material gas accumulation, further work will be required to establish commerciality and the full potential of this play across the licence."
Berenberg noted the well discovered gross resources of about 1 trillion cubic feet of gas which is behind the pre-drill estimates of 1.5 trillion, on account of the low permeability encountered in the reservoir.
"Despite the solid volumes, the result is slightly underwhelming due to the reservoir characteristics and uncertainty regarding commerciality," Berenberg said.
The German investment bank maintained its 'hold' rating for Harbour.
It continued: "The low reservoir permeability suggests that development of the resource will be best executed with horizontal wells, rather than vertical and deviated wells as previously planned. It is possible that more wells will also be required to develop the resource given the poorer flow characteristics. This will likely increase costs compared to previous expectations."
The Timpan-1 exploration well was drilled on the Andaman II licence offshore North Sumatra, Indonesia. The partners in the licence are Premier Oil Andaman Ltd, a Harbour Energy subsidiary, which owns 40% and is the operator, with BP PLC holding 30% and Emirati state-owned holding company Mubadala at 30%.
By Paul McGowan; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.
Related Shares:
Harbour EnergyBP