Exciting if nerve-wracking times for backers of Falkland Oil and Gas Limited, which this weekend spudded the Humpback exploration well on its acreage to the south and east of the Falkland Islands. This is a big well for the AIM-quoted explorer, which has a 52.2 per cent stake in the wildcat – the only well in this season’s drilling campaign to venture outside of the North Falkland Basin.
Humpback lies in PL012 in 1,260 metres of water. The well will drill to a TD of 5,350 metres to test multiple stacked reservoirs in the Cretaceous Diomedea fan complex. FOGL estimates gross unrisked mid-case prospective resources for Humpback of 510 million barrels. It lies within a cluster of similar prospects, in the Fitzroy sub-basin, which have a total, combined, prospective resource of over one billion barrels of oil.
“The Humpback well is the exciting first test of a new geological play concept within the South and East Falkland basins,” said FOGL chief executive Tim Bushell. “In the event of encouraging results, we have identified, on 3D seismic, multiple follow-up prospects.”
The well is anticipated to take approximately 65 days to drill. FOGL’s paying interest in the well is 27.5 per cent with its costs partially carried by operator Noble Energy. Success here would vindicate FOGL’s long held belief in the prospectivity of the waters to the south and east of the islands, even though its first wells down here were unsuccessful.
This time round, however, the £155 million market cap company is no longer betting the house on the outcome of one well: it has successfully diversified and is also a significant acreage holder in the North Falkland Basin, where there’s already one commercial oilfield – Sea Lion – and recent exploration drilling has added further resources.
FOGL has participated with a 40 per cent stake in the recent Isobel deep discovery well – operated by Premier Oil – which opened up an exciting new oil play some 30 km south of the Sea Lion field as well as the Zebedee oil and gas discovery, which came in ahead of FOGL’s pre-drill expectations. Again, it has a 40 per cent stake in this well.