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April 5, 2015

New Falkland oil discovery promises a boost to Sea Lion development

The new Zebedee oil discovery promises a significant increase in resources for the planned Sea Lion development and it could add new impetus for the nascent oil industry isolated waters in the South Atlantic.


The Zebedee exploration well, the first of four initially planned for the North Falkland basin this year, found both oil and gas within range of the Sea Lion oil field. The well encountered 25 metres of net oil pay and 17.5 metres of net gas pay in separate reservoirs, which were both said to be good quality.


According to FOGL the Zebedee results are better than pre-drill expectations, and it expects they will positively affect resource estimates for the new discovery.


FOGL's estimate of Zebedee's size prior to drilling was for a 280mln gross prospective resource, though it is worth noting that some of the well's multiple targets were not fully viable in this location.


Mark Henderson, analyst at Westhouse Securities said: "This is excellent news for all the Falkland Islands players and is a great start to the 2015 six well exploration campaign."


"Investors will gain greater confidence in the resource potential and development prospects of the North Falklands basin, and this increases the attractiveness of the Falklands to potential farm-in partners, particularly relating to the longer term development of Sea Lion."


Tim Bushell, FOGL chief executive, said: "This is an excellent result and one that adds significantly to the proven hydrocarbon resources of licence PL004b and the greater Sea Lion area.”


“This well further confirms the extension of the Sea Lion discovery and associated reservoirs into PL004b, which have now been demonstrated to contain a significant proportion of the total field resources.”


Andrew Lodge, Premier Oil’s exploration director, highlighted that the new Zebedee discoveries will add to the “future phases of development in the area”.


Lodge added that exploration partners now look forward to the drilling of the Isobel Deep prospect, which he said is potentially the highest impact well in this campaign.


Rockhopper chief executive Sam Moody, meanwhile, described Zebedee as a “fantastic start” to the programme and an “early proof” of the significant remaining potential of the North Falkland Basin.


“The new discoveries add to our already significant resources we have discovered in the basin and we now look forward to drilling the higher risk Isobel prospect before the rig moves to drill in the South Falkland Basin," he added.



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