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.

Breaking Brockham News, Earthquakes & Horse Hill Update

Brockham News!

We have some very important news to share: last Friday Angus Energy announced that “it is extremely unlikely that commercial hydrocarbon flow can be established from the Kimmeridge layer at Brockham” and that they have entered into discussions to sell their 65% interest in the Brockham license to an unnamed third party. The news slashed Angus’s share price by 60% in a single day. It came as a huge surprise not only to us, but also the investor community, who were expecting Angus to continue with the well tests commencing in the week of 17 June, as per the published regulatory news release two weeks prior.

Angus also clarified that the Kimmeridge would not flow “on any conventional approach” and that they ruled out the use of stimulation techniques including hydraulic fracturing (because Angus Energy is a non-fracking company, i.e. they don’t have the expertise or the financial resources to frack successfully), in effect confirming what Professor David Smythe, BOW and others have been saying all along – that it will not be possible to commercially produce from the Kimmeridge without hydraulic fracturing or acid stimulation.

This means that there’s still a danger that Angus will sell the Brockham operatorship and their 65% interest in the license to a company who will want to frack. We will be watching developments closely.

In the meantime, we’d like to thank all those who have been keeping a watchful eye on the actions of Angus Energy at Brockham, and helping to maintain pressure on the regulators to make sure the site is monitored closely. We can say with certainly that the scrutiny by regular people made a difference.

Earthquakes Meeting

Over 150 people, including a number of local councillors, attended a public meeting on earthquakes and unconventional drilling in the Weald Basin we held last month at Beare Green Village Hall.

David K Smythe, Emeritus Professor of Geophysics in the University of Glasgow, delivered the main talk, covering the history of oil & gas exploration in the Weald between 1960-90 versus the current phase led by penny-share companies of questionable competence and integrity, the reasons why he supports the Edinburgh University thesis that the Newdigate earthquakes are induced by activity at the Horse Hill site, and recommendations for local residents as well as their elected representatives.

To watch the recording/ see slides, go here.

On a related note, we created a page dedicated to the Newdigate earthquakes and a page tracking related news, where you can catch up on what happened so far.

More on Horse Hill

The meeting to decide on the significant expansion proposals at Horse Hill has been postponed yet again, and it is currently planned for 11th September 2019. This application received over 1,000 objections. Although the official consultation has now ended, you can still comment to the council (here are some helpful links).

And more..

We also want to share this recent story about a breach of blowout preventer safety laws at Horse Hill. Blowouts pose risk to life for well workers, and can have profound consequences for the environment and wildlife. Please share this story with anyone concerned.

Blog Posts

Public meeting on earthquakes fills up village hall

Click here to go to David Smythe – Beare Green playlist

Video credit: Phil Jackson, itistv 

Over 150 people, including a number of local councillors, attended a public meeting on earthquakes and unconventional drilling in the Weald Basin held last Saturday (18 May) evening at Beare Green Village Hall. The gathering was organised by Brockham Oil Watch and chaired by Max Rosenberg, Chairman of CPRE Mole Valley.

David K Smythe, Emeritus Professor of Geophysics in the University of Glasgow, delivered the main talk, covering the history of oil & gas exploration in the Weald between 1960-90 versus the current phase led by penny-share companies of questionable competence and integrity, the reasons why he supports the Edinburgh University thesis that the Newdigate earthquakes are induced by activity at the Horse Hill site, and recommendations for local residents as well as their elected representatives.

Professor Smythe criticised the authorities and the operator for withholding crucial work programme logs from the Horse Hill site, and advised that the precautionary principle should apply halting operations while more research is undertaken. He called for residents to collate systematic data on earthquake damage.

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Photo credit: John O’Houston

Ada Zaffina of BOW gave a brief overview of the loophole in the UK regulatory system with regards to acid stimulation, potentially allowing these stimulation treatments to take place under the guise of acid wash. The presentations were followed by a lively Q&A time stretching the duration of the meeting to two hours.

We are very pleased with the turnout, especially since we were competing with the Eurovision Final and the FA Cup Final. The level and detail of questions and comments from very astute locals and councillors shows deep concern about the earthquakes and the possibility of larger magnitude tremors. We hope that this will embolden more people to speak up about their concerns and demand clear action.

With the recently released FOI documents showing that a well intervention on HH-1 was planned for early April 2018, UKOG’s fundamental argument that the earthquakes started before they did any work on this well is put into question. There are striking coincidences between the timings of operations (at Horse Hill) over the last year or so and ongoing tremors, and those are much stronger than the 0.5ML that halts operations on fracking sites up North. Many people in Newdigate live in constant anxiety over the prospect of another, possibly stronger earthquake. We shouldn’t be searching for a smoking gun that Horse Hill is inducing the tremors, we should be asking that operations be stopped until we are absolutely sure that they are not causing them.

We would also like to thank everyone involved in the organisation and promotion. This event is a great example of worried communities coming together.

 

Presentation Slides:

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Smythe surrey earthquakes talk 18may19 v1.1 annotated

Traffic Light System Or No System At All ?

This blog is based on our submission to the All PARTY PARLIAMENTARY GROUP ON THE IMPACT OF SHALE GAS – TRAFFIC LIGHT SYSTEM, held on 2 April 2019.

Our submission focused on the fact that there is no TLS in the Weald basin because the regulatory regime doesn’t view the operations taking place here as fracking. Fluid injections under pressure up to fracture pressure are allowed at Horse Hill and elsewhere in the Weald (and beyond), but there is no monitoring or reporting of injected fluid volumes, injection pressures or even dates of these operations!

 

Acid-based stimulations already are or will be a relevant concern at sites across the South East of England (mainly in Surrey and West Sussex plus Isle of Wight) as well as places such as Wressle in Lincolnshire, Ellesmere Port in Cheshire and West Newton in East Yorkshire.

Acid stimulations involve pressurised injection of fluids underground, including acid in various concentrations, at below hydraulic fracture pressure (matrix acidisation) or above (acid fracturing). These types of stimulations, along with high volume hydraulic fracturing, should be seen as forms of fracking. Indeed, in California, where there is a history of extraction using the various methods, fracking bill SB4 (2013-14) regulates hydraulic fracturing and acid stimulation treatments at any applied pressure in exactly the same way. In Florida, a heated debate is taking place right now about the proposed bills banning hydraulic fracturing, some including matrix acidisation and some leaving it out.

Acidisation - Smythe

Source: David Smythe

In the UK, the regulations of acid stimulations are virtually non-existent. This includes induced seismicity regulations. The Traffic Light System only applies where a Hydraulic Fracture Plan is required, although it seem not in all cases, as the Oil and Gas Authority retains discretion over the details required in an HFP. It is not clear either for which operations an HFP is required, but in any case, an HFP would never be required for operations intended at below hydraulic fracture pressure. (See below note: When is Hydraulic Fracture Plan Required?)

Operations proposed in the South-East are never described (by the operators) to the regulatory agencies as any kind of fracturing. In fact, they are not described as stimulation at all, but rather as acid wash, arguably exploiting the loophole in the system created by the lack of a clear definition of what is acid wash and what is acid stimulation. The permitting of these procedures lies with the Environment Agency, which is the only regulatory body in the UK to even make a reference (although in very vague terms) to acid stimulation. By calling their intended operations acid wash the operators are also able to escape environmental regulations though de minimis exclusions.

Despite the procedures being described as acid wash, the pressure at which they are allowed by the EA to be performed is anywhere up to hydraulic fracture pressure.[1] [2] And for these types of operations, an HFP is never required, nor is the reporting of dates/timings of treatment, volume of injected fluid or pressure at which it was injected. Environmental permits for the so-called acid washes are issued based on “operator intent” and there is very little monitoring of what actually takes place once the permit is issued. Monitoring is limited to visual observations of equipment on surface during occasional site visits (for example we were told by the EA on 4 Feb 2019 that heir most recent routine site inspection of Horse Hill occurred on 23 August 2018), which might include on site document check, for example of waste records.

This is a stark contrast with the type of monitoring and reporting required for high volume hydraulic fracturing operations, which includes daily reporting of injection summaries and charts, such as the example here.

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Hydrochloric acid at Horse Hill – photo taken in July 2018

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Hydrochloric Acid with Additives – photo by Horse Hill Monitoring Post taken on 21 Jan 2019

According to analysis by David Smythe, Emeritus Professor of Geophysics in the University of Glasgow, the Horse Hill-1 well was drilled into a fault zone.  And the assessment of Professor Stuart Haszeldine, Dr Cavanagh and Dr Gilfillan at the University of Edinburgh supports the concern that oil exploration at Horse Hill triggered the recent swarms of earthquakes around Newdigate, possibly also by bleeding the well annulus to manage pressure prior to testing. Therefore, it could be inferred that anything that has the potential to change the downhole pressure, either to increase it or to decrease it, could induce seismicity. And if that is correct, then even activities such as an acid wash under a pressure slightly greater than formation pressure could be responsible for earthquakes. And even more so if the acid is applied at a greater pressure, approaching hydraulic fracture pressure.  Moreover, there is no monitoring in place to ensure that the injection pressure never exceeds fracture pressure. This is left to the operators themselves to monitor.

In addition, the Cuadrilla data on fracking at Preston New Road (example in Appendix 2) confirms that on several occasions the company put some (1 or 1.5 cu m) of 15% Hydrochloric acid into the well, presumably at the start of the frack.  So they have been, at least partially, acid fracking already.  This should also be a strong indicator that the Traffic Light System should apply to acidisation and acid fracking as well.

We therefore propose that the Traffic Light System (along with all the required reporting and monitoring) should be extended to include all pressurised injections at any applied pressure, and that it should be considered whether other operations that have the potential to induce seismicity should also be included.

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When is a Hydraulic Fracture Plan Required? 

The Oil and Gas Authority’s Consolidated Onshore Guidance (Dec 2017) says that HFP is required when hydraulic fracturing is proposed as part of completion. It also says: If the proposed injection volumes fall below the BEIS associated hydraulic fracturing thresholds, the OGA may decide less information or monitoring is appropriate, but an HFP will always still be required. This implies that an HFP is always required for operations which exceed hydraulic fracture pressure.

However, in May 2018, as part of oral evidence given to Communities and Local Government Committee regarding planning guidance on fracking, Tom Wheeler, Director of Regulation at the OGA, seemed to have contradicted this guidance suggesting that HFP is always required only when the operations meet definitions set out in legislation[3]: “We use the Infrastructure Act definition as clarified by the Secretary of State last year to determine when a company needs to submit what we call a hydraulic fracture plan.  If a plan does not meet the water-based tests that are set out in the legislation, we would not always require one.  We reserve the right in guidance to require one should we think there are risks of seismic activity as a result of it.  We would always require a hydraulic fracture plan when it meets the tests set out in the Infrastructure Act.  We find the definition useful and we rely on it for that purpose.”

 

[1] “The activities outlined in the Waste Management Plan and any of the application supporting documents does not include proposals for well stimulation techniques above the fracture pressure of the surrounding target formations.” P.36 https://bit.ly/2WonKQ2

[2] See here, pink highlight

[3] Q123: https://bit.ly/2YuDi6C