Lancaster EPS exceeds production expectations

Source: press release, 2 September 2019

Harsh-environment semi-submersible ‘Transocean Leader’
Harsh-environment semi-submersible ‘Transocean Leader’ (photo: Transocean)

Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, has provided an operational update in relation to the Lancaster Early Production System (EPS) and Lincoln Crestal (205/26b-14 well).

The start-up phase of the Lancaster EPS commenced with introduction of hydrocarbons on 11 May 2019. The first oil milestone was achieved on 4 June 2019. For a significant portion of the period from first oil to date, production has been constrained by the use of only one of two subsea flowlines, as a result of operational necessity. This has limited maximum production capacity and Hurricane’s ability to carry out activities planned to increase the company’s understanding of the reservoir’s performance. Notwithstanding this constraint, since first oil, Lancaster EPS system availability, production and cash flow generation have been above company guidance.

Operations have now recommenced with two flowlines. As operations move into the next phase of commissioning over the coming months, production and availability are likely to be constrained as certain planned works and delayed data gathering activities will require periods of production shut-in. Hurricane therefore expects system availability to revert towards prior guidance, being 45% for Q3 and 65% for Q4.

Hurricane’s analysis of water production continues to indicate the presence within expected ranges of stranded or perched water, with no indications of aquifer water. Production over the last month has been through a single flowline and therefore water cut cannot be attributed between the two wells. Further data will be available now that production through both flowlines has recommenced. This will facilitate better understanding of individual well performance and water cut. It will also allow planned flow rate variation to be undertaken, in order to optimise well performance.

Hurricane maintains its production guidance for the second half of 2019 at the aggregate level (Approximately 11,000 bopd based on previously advised expected system availabilities of 45% in Q3 and 65% in Q4).

Lincoln Crestal is the second well in a three-well programme on Lincoln and Warwick (the Greater Warwick Area) being drilled in partnership with Spirit Energy following their farm-in to 50% of the Greater Warwick Area in September 2018. The wells are being drilled using the Transocean Leader semi-submersible drilling rig.

Lincoln Crestal was spudded on 12 July 2019 and has now reached total depth of 1,780 metres TVDSS, including a 720-metre horizontal section of fractured basement reservoir. Lincoln Crestal operations have now moved onto preparation for drill stem testing. A further update will be made following the completion of this stage.

Dr Robert Trice, Chief Executive of Hurricane, comments, “We are delighted to provide an update on Lancaster EPS progress and to communicate that our production levels have been above expectations for this early phase of operations. However, despite these promising results, we remain cognisant that it will take up to a year to acquire and interpret sufficient performance information to test our reservoir model of the field.”

“Now that we are back to flowing the Lancaster wells through separate flowlines, we look forward to gathering data on individual well performance to help optimise well delivery as well as improve the company’s understanding of the reservoir’s performance. On the Greater Warwick Area, Lincoln Crestal well operations are now progressing to drill stem testing. We look forward to reporting the result shortly,” Dr Trice adds.