The West Newton joint venture (JV) said its conceptual development plan is focused mainly on gas with eight phased wells targeting 35 million barrels of oil equivalent with 203 billion cubic feet (bcf) sales at the project in East Yorkshire.
JOINT VENTURE
The JV comprises Reabold Resources plc with 56% economic interest via its 59% share in operator Rathlin Energy (UK) Ltd, which has a 66.67% in PEDL183.
In addition, Reabold has a 16.665% direct licence interest in PEDL183, and Union Jack Oil plc also owns a 16.665% economic interest.
The licence contains the WNA-1, WNA-2 and WNB-1Z hydrocarbon discoveries.
GAS FOCUS
Statements from Reabold and UJO said that, following completion of work conducted internally and scoping exercises and modelling by independent third-party experts, the JV aimed to focus mainly on gas.
Technical and financial analysis of the extended well test (EWT) indicated the “potential for good well productivity from proposed new horizontal wells” and underpinned the “strong economic returns”.
TIMESCALE
The partners added that the plan involved an initial five-well development drilling campaign, with first gas anticipated in 2025, with modelling plateau production rates of 44m bcf per day of sales gas.
A further three wells would be drilled from 2028 to 2030, to maintain plateau production of sales gas.
The JV companies intend to drill low-cost wells by phasing the development capex cost which would “significantly” de-risk project finances.
GREATER WEST NEWTON
The companies said that potential also existed for future gas discoveries within the Greater West Newton area to be tied into West Newton infrastructure, although has yet to be included in the modelling.
Exploration targets within the Greater West Newton area include the Spring Hill, Withernsea and Ellerby prospects.
ECONOMICS
A competent persons report is due for completion in Q3 2022.
The first horizontal appraisal well is planned for H1 2023 followed by a decision on a field development plan.
“Economic modelling indicates significant cash flow generation from the first year of production, anticipated in 2025, with cumulative gross cash flow calculated at circa US$1.3 billion.
“The gross NPV(10%) of the project is modelled to be US$448 million pre-tax with a pre-tax IRR of 87%.”