Hurricane abandons plan to connect Lincoln Crestal well for production this year

Hurricane Energy has revealed it will not tie back the Lincoln Crestal well, located in the West of Shetland region, for production through the Aoka Mizu FPSO this year, but intends to tie back the Lancaster well for production in early 2022.

Seeking consent to delay abandonment

The 205/26b-14 well (the Lincoln Crestal Well) located in the Greater Warwick Area (GWA) was drilled in 3Q 2019, and tested at a maximum stable flow rate of 9,800 stb/d. Regulatory consent for suspension of the well, with gauges downhole, was granted for the purposes of completing pressure build-up tests and gathering interference data. The suspension consent required that the well be plugged and abandoned by June 22, 2020.

Hurricane said on Thursday that the GWA partners, comprising Hurricane and Spirit Energy, intend to seek regulatory consent from the Oil and Gas Authority to delay the abandonment of the Lincoln Crestal Well in order to obtain interference data during well testing in 2020.

One or more sub-vertical wells are planned to be drilled and tested in 2020, to determine the maximum vertical extent of the Lincoln field in order to meet the commitment well requirement of the P1368 license extension, Hurricane explained.

Installation vessels released 

According to Hurricane, the GWA partners have concluded that it will not be possible to tie-back the Lincoln Crestal Well to the Aoka Mizu FPSO in 2020 and therefore the installation vessels to carry out this work under contract with the oilfield service provider have been released.

The GWA partners have agreed to continue to build all the previously ordered equipment. If the GWA partners are unable to obtain approval to extend the suspension consent, the Lincoln Crestal Well will be plugged and abandoned by the Paul B Loyd Jr rig in March 2020, prior to the planned start of the Lincoln Commitment Well.

The GWA partners are reviewing the future work program and budget for the Greater Warwick Area. Hurricane said that further updates would be provided on conclusion of these discussions with Spirit Energy.

Making use of FPSO capacity with Lancaster well 

The company still intends to make maximum use of the Aoka Mizu FPSO’s oil throughput capacity. As part of this strategy, Hurricane is planning an accelerated Lancaster work program, focussed on drilling an additional production well on Lancaster in 2020, in addition to the drilling of one or more subvertical wells (in 2021) to determine the maximum extent of the Lancaster field, to satisfy the terms of the P1368 license extension.

A rig contract is being negotiated in order to be able to drill and test a production well on the Lancaster license (Lancaster -8 Well) during 2Q/3Q 2020. The company is carrying out the necessary steps to be able to proceed on this schedule, subject to regulatory consent, finalization of costs and contracting, and has already ordered the time critical long lead items.

On success, and subject to regulatory consents, the company would intend to tie-back the Lancaster -8 Well to the Aoka Mizu FPSO in 2021, with a provisional first oil date in 1Q 2022. Commitment to capital expenditure in respect of the installation of the tie-back will not be made until after the Lancaster -8 well has been successfully tested.

Increased production through the Aoka Mizu FPSO would improve unit economics and generate increased operating cash flow for providing returns to shareholders and/or funding future phases of development, Hurricane stated.

Dr Robert Trice, Chief Executive of Hurricane, commented: “We continue to focus on progressing opportunities towards full utilization of the Aoka Mizu’s throughput capacity. A further Lancaster production well would allow us to evaluate the productivity of another part of the Lancaster reservoir, away from the two existing wells, whilst aiming to deliver additional wholly owned production and reducing per barrel costs. I look forward to providing further confirmation as costs are finalized and the relevant agreements are put in place.”