Sterling Resources and EnCore Oil prepare for further drilling at Cladhan
AIM listed oil and gas group Encore Oil (LON:EO.) this morning reported that drilling was expected to start in the next few days on appraisal wells close to the Cladhan oil discovery in the UK Northern North Sea. Sterling Resources (TSX-V:SLG), the Canadian operator on the block, reported that a rig was currently being mobilised to the site. The aim of the appraisal programme is to drill further down dip, looking for deeper oil in the structure to the east of previous wells drilled there.
The original Cladhan discovery was made in December 2008 but wasn’t drilled again until August last year when further appraisal uncovered a much larger discovery than anticipated. Two months earlier, the EnCore share price began to surge after it made a significant discovery at Catcher in the Central North Sea. Since then, Sterling has produced a resource estimate that puts P50 contingent resources at Cladhan at 89m barrels and prospective resources at 167m barrels. Sterling, as operator, holds a 39.9% working interest in the licence, with Wintershall holding 33.5%, EnCore holding 16.6% and Dyas UK holding 10%
As part of the latest appraisal plans, at least one well and a sidetrack will be drilled using the Transocean Prospect semi-submersible rig. This will be followed by a sidetrack to a second location to an undrilled channel further south of the current well penetrations. Assuming success with both of these wells, there is an option for the Transocean Prospect to drill a second sidetrack from the same well out into the fan system. Information from this drilling campaign will aid in the planning of the field development conceptual design already underway. The expected drilling time for these three wells is 40 days, 25 days and 30 days, respectively.
John Rapach, Sterling’s chief operating officer, said: “We’re certainly pleased to be back drilling after the successful autumn campaign in 2010. Our production test of the 210/29a-4Z well at 5900 barrels of oil per day and then finding oil down dip of that well with the 210/29a-4Y sidetrack have given Sterling and its partners the encouragement to advance an accelerated appraisal drilling program. We have managed to prepare to drill the next well, 210/30a-4 within seven months of re-entering the original discovery well 210/29a-4, in August 2010.”
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4 Comments on this News show/hide all
Hmm big mistake in the header;-)
http://finance.yahoo.com/news/STERLING-RESOURCES-COMMENCES-cnw-2047653851.html?x=0&.v=1
"The commencement of these wells signals the beginning of an ambitious operated 2011 drilling campaign for Sterling," stated Mike Azancot, Sterling's President and CEO. "As well as Cladhan and Grian, we have a very exciting program of operated exploration and appraisal wells internationally in the second half of 2011. We look forward to drilling offshore Romania on the Eugenia and Ioana prospects (Sterling 65 percent), offshore Netherlands on an existing oil discovery in the F Quad (Sterling 50 percent) and onshore Romania in the Craiova license (Sterling 50 percent) on the Plenita prospect and to a deeper target with shale gas potential. All these wells target significant oil or gas resources capable of providing considerable growth potential across the portfolio."
Not too bad a drilling programme really.
repo
Sector watcher on FT alphaville today.
EO and its partners in blocks 210/29 and 210/30 in the North Sea will spud the first of three back-to-back appraisal wells on the Cladhan discovery in the next few days. The original discovery was made last summer and contributed, along with the Catcher discovery, to a 9-fold increase in EO's share price last year. Currently the JV is carrying around P50 estimates of 90m barrels oil in place on a contingent basis, with a further 170m barrels prospective, which presumably these three wells could potentially prove up
NH
Assuming 40% recovery, we could therefore be looking at around 100m barrels recoverable. However given that an oil water contact has yet to be established, there is the potential for significantly greater upside. The P10 case for contingent/prospective totals over 460m barrels OIP. EO has a 16.6% interest in Cladhan and 15% of Catcher. Following the disappointing result on Catcher North last week, the group and its partners could do with a positive result on Cladhan. The shares have come back 20% in the past couple of weeks and are now trading at an attractive entry level.
In reply to repobear, post #1
Just in case anyone hasn't cottoned on... Sterling ENERGY is a different company.
Sorry, totally my fault there. Very embarrassing - I'd even made the mistake earlier and corrected myself. It came back to haunt me with the headline. Ben