Good news for Falkland’s explorers as Zebedee strikes oil and gas

By Amy McLellan

A promising start to the 2015 exploration campaign in the Falkland Islands, with the first of the six wells, targeting the Zebedee prospect, making an oil strike. The 14/15b-5 exploration well in PL004b encountered the seven predicted reservoirs in the Cretaceous F1-F3 interval plus an additional sand in the F2 sequence.

Three of the sands were hydrocarbon-bearing at this location, including the primary Zebedee F2 fan, with additional oil shows in the deeper F3 targets. In all, wireline logging indicates 25.3 metres of net oil pay in Zebedee, with 18.5 metres of net gas pay in Hector and an additional 2.6 metres of net oil pay in the F2 oil-bearing sand.

The Zebedee sand was encountered on prognosis, penetrating a gross reservoir package of 29.3 metres with net oil pay of 25.3 metres. This proves the presence of a further fan system to the south of Sea Lion and its previously discovered satellites. The reservoir quality is amongst the best encountered to date and no oil water contact was observed.

The previously undrilled Hector sand also came in on prognosis near the crest of the structure, penetrating a gross reservoir package of 27.6 metres, of which 18.5 metres was net gas pay. Importantly pressure data indicates that the gas gradient is offset from the gas gradient observed in the Beverley and Casper South reservoirs, which means Hector could be oil-bearing in a downdip location.

In addition to the two principal reservoirs, a further F2 oil-bearing reservoir was encountered above the Zebedee fan, with net oil pay of 2.6 metres. The sand, which Rockhopper currently maps to form part of the Ninky South prospect, was tagged in a very marginal position and was not therefore included in the pre-drill stack prognosis. Good oil shows were also recorded at the deeper F3 targets but at this location the sands were not well developed.

This is certainly a promising start to the 2015 campaign and good news for the trio of London-listed oil companies behind the well: AIM’s Rockhopper Exploration with 24 per cent, Main Market-listed Premier Oil with 36 per cent and AIM-quoted Falklands Oil & Gas with 40 per cent.
Rockhopper Exploration boss Sam Moody said the Zebedee well was a “fantastic start” to the campaign. “It provides early proof of the significant remaining potential of the North Falkland Basin,” said Moody. “In addition to the new discoveries at Zebedee and Hector, we have good oil shows throughout the deeper F3 section which is encouraging should better quality reservoir be encountered in this section elsewhere in the basin.”

Moody also claimed a victory for Rockhopper, which retained the subsurface lead in the North Falkland Basin following its 2012 farm-out to Premier Oil, which is taking the lead on the development of the Sea Lion oil discovery. “Our exploration team now enjoys a success rate of 8 out of 10 wells in licences PL004 and PL0032,” noted Moody.

Tim Bushell, CEO of FOGL, said the result added significantly to the proven hydrocarbon resources of the licences and the greater Sea Lion area. The reservoir in both the Hector and Zebedee intervals is of good quality and the results are better than FOGL’s pre-drill expectations and will positively impact the AIM company’s resource estimates.

The Zebedee well will now be plugged and abandoned as a successful exploration well, with the Eirik Raude rig now moving to drill the first exploration test on the high impact Elaine/Isobel fan complex in the southern part of the North Falkland Basin. This is a higher risk well but investors won’t have long to wait for news, with results expected in late April.