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Rex tool takes exploration out of stone age

Subsidiary Lime exploits virtual drilling to optimise prospect portfolio as Rolvsnes production planned 

Lime Petroleum is pursuing “smart exploration” by applying its so-called virtual drilling technology to prospects in the prolific Utsira High play and other areas off Norway, while also targeting test production in 2019 from the existing Rolvsnes find.

The ambitious explorer has identified two fresh prospects, Goddo and Orkja, as potential drilling candidates that could be tied back to nearby existing infrastructure in the event of a discovery.

Lime, a majority-owned subsidiary of Singapore-based Rex International Holding, has used its Rex Virtual Drilling (RVD) software tool to screen the pair as a means of de-risking prospects and fine-tuning its exploration portfolio prior to making costly drilling commitments.

The first such prospect on which RVD was used was Rolvsnes that turned up a discovery of between 10 million and 46 million barrels of oil equivalent after being drilled in 2015 in Lundin Petroleum-operated production licence 338C, in which Lime holds a 30% stake.

However, Lime claimed the North Sea find - also dubbed Edvard Grieg South (EGS) - could hold as much as 77.9 million barrels of oil and 78.7 billion cubic feet of gas, based on an independent assessment.

The Oslo-based company said it is planned to launch initial test production in 2019 from the find, which is likely to be developed as a subsea tieback to the Lundin-operated Edvard Grieg platform.

Rex chief executive Mans Lidgren said “EGS is a prime example of our technology and infrastructure-led strategy in Norway”.

Lime has used RVD “to select and build a cluster of investments in this oil-prolific area that already has pipeline infrastructure in place, allowing a fast-track path to potential commercialisation and return on investment when we make more oil discoveries”.

The company holds a 20% stake in Lundin-operated PL815 that hosts the undrilled Goddo prospect, which could also be tapped as a tieback to Edvard Grieg, and a 30% interest in Aker BP-operated PL818 that contains Orkja, which could be tied back to the latter operator’s Ivar Aasen field.

“Our aim is to prove up these adjacent fields in the mid to long term to grow our pool of resources, on top of achieving production in EGS in the short term,” Lidgren said.

RVD was used to screen the unconventional weathered and fractured basement reservoir that holds Rolsvnes prior to drilling of the well in a water depth of around 100 metres.

The tool is able to pinpoint reserves using conventional seismic data and the latest version, RVDv3, provides evidence of the existence of oil by isolating distinct signals for oil from the background noise of sand, rock and water, according to the company.

Furthermore, by enabling the explorer to “see the oil” in a virtual data environment, it means the optimal drilling location can be identified for the well.

Lime has been pruning its prospect portfolio based on the results of RVD analysis and, on this basis, also declined participation in more than 15 licences in which subsequent drilling on prospects came up dry.

“Risk and commercialisation are the two key factors guiding smart exploration in the region,” Lidgren said.

“Exploration and drilling remain hugely expensive and time-consuming so any technology that can de-risk these activities - especially in a low oil price environment - is incredibly valuable.”

Lime now holds a total of six licence assets off Norway, including its three North Sea holdings as well as stakes in a pair of Norwegian Sea licences and one in the Barents Sea.

The company, which last December secured a two-year extension to a Nkr400 million ($50 million) credit facility to fund its exploration plans, said it is now looking at several farm-in opportunities at producing assets that “would offer financial and tax benefits in addition to reducing overall business risk”.