Unfavorable price environment makes new gas discovery unprofitable

Norway’s oil and gas player Vår Energi, majority-owned by Italy’s Eni, has found more gas in the Barents Sea, thanks to the drilling operations, which were conducted with one of COSL Drilling Europe’s semi-submersible rigs off the coast of Norway.

The exploration well 7122/9-2 for the Elgol prospect, said to be the first in production license 1131, was drilled by the COSL Prospector semi-submersible rig, which secured a two-year contract in September 2023 with Vår Energi in the Barents Sea and started the job in the third quarter of 2024.

This deal, which comes with three years of extension options for a maximum duration of five years, builds on the cooperation between Vår Energi and Equinor, enabling the duo to secure access to the rig for the 2024-2026 period.

With a maximum drilling depth of 7,500 meters, the COSL Prospector rig is of GG5000 design and can operate in water depths up to 1,500 meters. Vår Energi’s partners in production license 1131 are Petoro, Equinor, and Aker BP.

The objective of the 7122/9-2 well was to prove petroleum in Upper Permian reservoir rocks in the Ørret Formation. The well encountered a 1.5-meter gas column in a sandstone reservoir in the Ørret Formation, where reservoir properties were moderate.

Furthermore, the remainder of the reservoir in the Ørret Formation totaled 28 meters with variable, generally poor, reservoir quality. The gas/water contact was not encountered, and the well was not formation-tested. However, data acquisition and sampling have were carried out.

The well was drilled to a vertical depth of 1,844 meters below sea level and terminated in the Ørret Formation in the Upper Permian. The water depth at the site is 415 meters. The preliminary estimates place the size of the discovery between 0.4 and 3 million standard cubic meters of oil equivalent.

This corresponds to 2.6-19 million barrels of oil equivalent. According to the Norwegian Offshore Directorate (NOD), Vår Energi’s new gas discovery in the Elgol prospect is not profitable, given current price assumptions. The well was permanently plugged and abandoned.

The Elgol prospect is part of Vår Energi’s ongoing exploration campaign in the Barents Sea. This exploration activity will continue throughout this year and in 2026. The next well on the company’s drilling agenda is 7122/8-3 S, which targets the Zagato prospect.

Vår Energi discovered oil resources in an appraisal well in December 2024 near the Goliat field in the Barents Sea, which is believed to have unlocked further potential in the area. The firm plans to drill around 20 exploration wells in the Barents Sea region over four years.