Siccar Point seeks permit to drill exploration well off Shetland

December 26, 2017

West Hercules rig; Image source: Statoil

Aberdeen-based oil company Siccar Point Energy has applied to the UK government for consent to drill an exploration well off the Shetland Islands.

The exploration well 208/2-A (Lyon) is located in license P1854, approximately 125 km northwest of the Shetland Islands. The water depth at the site is about 1,444 meters. The company’s application to drill the well was accompanied by an Environmental Statement.

The objective of the well is to determine the presence, depths and thicknesses of any sands in the Balder-Flett Formation and to establish any hydrocarbon saturations within any Balder-Flett Formation sands encountered. The expected hydrocarbon is gas, with the potential for a small amount of condensate to be present.

According to Siccar, the Lyon could contain 1-3 trillion cubic feet of gas recoverable.

The operations are planned to take place the end of May and August 2018. It is proposed that a well operator will be appointed to drill and operate the Lyon exploration well on behalf of Siccar Point. Offshore construction activities will take up to 58 days.

Siccar Point in late November entered into a farm-out agreement with Ineos covering two exploration licences (P.1854 and P.1935) in the West of Shetlands area, containing the Lyon prospect. Siccar Point now holds a 33.334% interest in the two licenses and Ineos has 66.666% interest.

The farm-out deal was completed in early December and Siccar Point simultaneously entered into a contract extension with North Atlantic Drilling Ltd (NADL) for the West Hercules semi-submersible rig to drill the Lyon well immediately following the Cambo appraisal well in 2018.

If Lyon is successful, Siccar Point thinks it would be large enough to form a new gas-hub development similar to the Total operated Laggan-Tormore fields which have been developed with subsea infrastructure with pipelines to the Shetland Gas Plant. Existing smaller gas discoveries in the Lyon area such as Tobermory, Bunnehaven and Cragganmore would all be suitable tie-back candidates into the Lyon gas hub.