Fresh gas discovery and appraisal activity put potential tie-back to North Sea platform on the table

Oil and gas player Neptune Energy has revealed a new gas discovery at an offshore prospect and confirmed the volumes for an appraisal well, both located in the PL 929 license, close to the Gjøa field, in the Norwegian sector of the North Sea. 

Back in May 2023, Neptune disclosed its plans for one exploration well and one appraisal well in its operated Gjøa area in the Norwegian North Sea. When October 2023 rolled in, the company announced the start of drilling operations at the Ofelia appraisal well, which came months after the Petroleum Safety Authority Norway (PSA) gave the firm consent to use the Deepsea Yantai rig for the drilling of the appraisal well 35/6-4 (Ofelia) in the North Sea.

The new well aimed to appraise and fully evaluate the hydrocarbon discovery in the Ofelia Agat formation, which was made in August 2022. A secondary target was to evaluate the upside of gas charged reservoir in the shallower Kyrre Formation.

To this end, the contract for the 2019-built Deepsea Yantai rig – formerly known as the Beacon Atlantic, which is owned by China’s CIMC and managed by Odfjell Drilling – was extended in December 2022 for two firm wells in Norway. In November 2023, the Norwegian Petroleum Directorate (NPD) granted Neptune Energy Norge a drilling permit for the well 35/6-4 A, which was due to be spudded the same month.

Neptune Energy has now announced a discovery at the Kyrre prospect and confirmed the volumes for the Ofelia appraisal well, 35/6-4 ST2, explaining that it completed this appraisal well in the Agat formation. The estimated recoverable volume is in the range of 16-33 million barrels of oil equivalent (mmboe).

In addition, the 35/6-4 A side-track was drilled into the overlying Kyrre prospect, resulting in a new gas discovery with estimated recoverable resources between 11-19 mmboe of gas, bringing the total recoverable volume from both discoveries to approximately 27-52 mmboe.

Odin Estensen, Neptune Energy’s Managing Director for Norway and the UK, commented: “Confirming the Ofelia volume as well as making another discovery nearby, further strengthens our understanding of the Greater Gjøa Area which is an important growth hub for the business in Norway. The dual discoveries allow for a potential fast track, low cost, and low carbon development.”

Located 23 kilometers north of the Neptune-operated Gjøa platform, Neptune highlights that Ofelia Agat and Kyrre will be considered for development as tie-backs to Gjøa. The company will also evaluate if its oil and gas discovery Gjøa Nord (Hamlet), with estimated recoverable volumes between 8-24 mmboe, can be jointly developed. 

Steinar Meland, Neptune’s Director of Exploration & Development in Norway, remarked: “The reservoir quality in the Kyrre discovery is very good, which allows for high production rates. We are preparing for several other exciting exploration opportunities in the area, such as the Cerisa well early next year.”

Located in the northern part of the North Sea, the Gjøa field was discovered in 1989 by Statoil (current Equinor). The operatorship was transferred to Neptune when production started in 2010. The semi-submersible Gjøa production unit, jointly developed with nearby Vega fields, has full processing and export capabilities and is electrified with renewable power from shore.

Neptune claims that this platform has been designed to act as an area hub and produce at less than half the average carbon intensity of the Norwegian Continental Shelf fields. While the oil is exported to the Mongstad crude oil terminal on the west coast of Norway, the gas is exported through the FLAGS pipeline to the St. Fergus Gas Terminal in Scotland.

Neptune’s entire portfolio – aside from its operations in Germany and Norway – is being acquired by Eni. While the German operations will be carved out before the completion of this acquisition, the Norwegian assets will be taken over by the Italian oil major’s majority-owned Vår Energi. These deals come with an aggregate enterprise value of $4.9 billion.

Gjøa is operated by Neptune Energy Norge, which is also the operator of license PL929 with a 40% interest. Other partners include Wintershall Dea Norge (20%), Pandion Energy (20%), DNO Norge (10%), and Aker BP (10%).

As one of the largest acreage holders in the prospective Troll-Gjøa area, DNO has already participated in six discoveries in this area with combined recoverable resources totaling 100 mmboe net to the company since 2021. The company plans to continue its extensive exploration and appraisal activity in the Troll-Gjøa area in 2024.