IOG runs into operational challenges with Skipper well, recovers oil

Independent Oil and Gas (IOG) has experienced issues during drilling operations on the Skipper appraisal well, in the UK sector of the North Sea, that in turn extended the duration of the well by thirteen days. However, IOG has managed to retrieve oil from the well. 

IOG, the 100% owner and operator of the Skipper well which lies in Block 9/21a in licence P1609, started drilling the well in July with the Sedco 704 semi-submersible drilling rig.

IOG said on Wednesday, August 17, 2016, that the Skipper well has been drilled to 3,860 ft. The company also stated that good quality reservoir condition oil samples have been retrieved from the Skipper field and have been dispatched to Aberdeen for full analysis, and that initial onboard observations during sampling confirm the oil to be mobile in the reservoir. This fulfills the primary well objective and will allow optimization of the Skipper field development plan, said the company. Approval of a field development plan will be subject to funding, IOG Board and regulatory approvals.

The oil viscosity appears likely to be within the 50cP – 150cP range expected by the IOG management, which is significantly better than the viscosity assumed in the Competent Persons Report (CPR) published by AGR Tracs in September 2013, IOG noted. If these oil properties are confirmed in the laboratory tests, which should be completed in September 2016, the development will require fewer wells than previous assumptions in the CPR thereby reducing the base case development costs, the company said.

“…we have proved that the oil is moving in the Skipper reservoir.”

After spudding on July 23, 2016, the well experienced some operational challenges, which were unrelated to the reservoir. This required an early re-spud of the well and therefore an increased overall well duration. In addition to this, in early August the company experienced a force 10 gale at the well location which caused a suspension of operations for almost two and a half days for safety reasons. These delays have resulted in an estimated increase in the operational phase of the well by approximately 13 days, the cost of which will be met in the short term by the existing London Oil and Gas loan facilities. Other costs are being deferred until the end of 2017.

The next step of the current well program is to drill the exploration prospects in the Lower Dornoch and the Maureen formations beneath the Skipper oil field in which the CPR author has mapped structures which together may contain 46 MMBbls of oil in place. IOG said that initial results of this exploration drilling phase of the well are expected to be available before the end of August.

Mark Routh, CEO of IOG commented: “The initial data acquired from the Skipper well, our first operated well, is an excellent result for IOG and operations proceed without any reported safety incidents.

“By retrieving the oil samples, the primary well objectives have been fulfilled and we have proved that the oil is moving in the Skipper reservoir. This is a significant step for IOG towards achieving the target of being a company with 100 MMBOE heading for development, in assets 100% owned as operator. I am immensely proud of the IOG team and extremely grateful for the co-operation and support from all of the contractors involved. The support of our financial backers is of course crucial and it is very satisfying to achieve our preliminary objectives which in turn repays their trust in the management team and our strategy.

“We now move on to drill the exploration prospects, where any further oil discoveries would provide additional upside and look forward to analyzing the results in order to progress the Skipper field development plan as soon as possible, in parallel with our exciting gas assets in the Southern North Sea.”