More Drilling For The Kimmeridge Oil That Angus Energy Said Could Not Be Produced Without Fracking

On 4th July IGas announced that it is planning to drill two wells at a new site in PEDL (Petroleum Exploration and Development License) 235, just west of Dunsfold, where another driller – UK Oil & Gas (UKOG) is in the process of securing a planning permission to also drill an exploratory well. In addition to the conventional Portland sandstone, the new wells are to target the Kimmeridge rocks – the same strata UKOG and Angus Energy (the third Weald player) are after at various locations around the South East including Brockham, Horse Hill, Balcombe, Broadford Bridge, Arreton on the Isle of Wight and an, as yet unnamed, location targeting the Holmwood prospect in PEDL 143 (which was going to be drilled from Leith Hill until the Environment Minister, Michael Gove, pulled the plug on these plans after nearly 10 years of planning battles).

The IGas announcement comes hot on the heels of news from Angus Energy the week before that their infamous Brockham sidetrack was extremely unlikely to flow commercially without stimulation such as hydraulic fracturing.

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In light of the recent persistent assurances of UKOG, Angus and now IGas that the unconventional Kimmeridge reservoir can be produced via conventional methods (or conventional wells), this is an astonishing admission, which vindicates what we have been saying all along – that the Kimmeridge will need fracking (whether with water or with acid) to flow commercially. Our warnings have been based on the available geological and extraction data from similar reservoirs elsewhere in the world, and on the expert opinion of David Smythe, Emeritus Professor of Geophysics at the University of Glasgow.

Angus Energy’s statement agrees with what Cuadrilla (who since handed over the operatorship to Angus) said about producing the Kimmeridge in Balcombe in 2011; their letter to the Department of Energy and Climate Change (the predecessor to today’s Oil and Gas Authority) reads that the company would “need to rely, to a significant degree, on being able to undertake hydraulic fracture stimulation(s) of this unconventional reservoir.” Some years later, the Balcombe Kimmeridge is yet to be successfully tested…

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At Broadford Bridge, where UKOG tested the Kimmeridge in late 2017/early 2018, it concluded that the rock “appears to be unproductive due to low reservoir permeability” and that new completion and “other reservoir stimulation techniques” would be considered on future wells (see here and here).

Horse Hill, also operated by UKOG, is the only site where, according to the company, the Kimmeridge has been flowing oil (although its development has been put on hold until after the start of full-scale Portland production..). Detailed analysis shows that the Horse Hill exploratory well was drilled into a fault, presumably to help the flow. And UKOG has been less than clear about the methods it is using on this well. In 2015 Stephen Sanderson, the firm’s chief executive and executive chairman, was openly talking about stimulation; while a 2016 paper published by EY – the global consultancy – and commissioned by UKOG, said that the Kimmeridge will likely require stimulation with acid to flow to surface at commercial rates (despite the apparently naturally occurring fractures). But since then UKOG has revised its position, claiming that only a weak acid wash should be used (while inadvertently confirming they did more than that at Broadford Bridge, but that it didn’t work).

In addition to this confusion we are also dealing with muddled definitions in the UK legal and regulatory framework about what fracking actually is, and whether it includes acid stimulation (we will explore this in another piece). Whatever the definition, the Kimmeridge rock is tight and any production expected to decline rapidly, and the proliferation of wells we are seeing looks like the beginning of what Mr Sanderson described in early 2016 in his famous statement: “this type of oil deposit very much depends on being able to drill your wells almost back-to-back so it becomes very much like an industrialised process”. You can watch see the exact excerpt here:

Who knows, maybe none of the above matters anyway? If, as Angus seem to also surmise (somewhat contradicting the above conclusion), the Kimmeridge at Brockham is not mature and doesn’t have enough recoverable oil, then no amount of fracking, acidising or other extreme methods will make the Kimmeridge wells commercial.

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