The underperforming RWE Dea-operated Breagh gas field off the UK is set for a major productivity boost as a pair of newly drilled development wells are set to increase flow rates and reserves, according to Canadian partner Sterling Resources.
Breagh was expected to hit peak output of 4 million cubic metres per day earlier this year but production has been lower than expected, with the field having been hit by outages due to technical issues after delayed start-up last October from an initial three development wells.
However, Sterling disclosed on Friday that a further production well, A07, was this week brought on stream at the field while a subsequent hole, A08, had yielded positive results and is set to start producing in October.
A recent production test on A07 yielded a rate of 32 million cubic feet per day (900,000 cubic metres per day) through the use of hydraulic stimulation., exceeding expectations, and the well is now ramping up output, Calgary-based Sterling said in its second-quarter results statement.
Furthermore, it stated the A08 well, drilled 1.8 kilometres north-east of the Breagh Alpha platform using the jack-up Ensco 70, struck four gas-bearing sand intervals in the field’s main producing reservoir with a pay zone of 112 vertical feet – the largest encountered to date at the field.
German operator RWE has now decided to use hydraulic stimulation on two of the intervals “as this could add significantly to the production potential of the well and potentially add to field reserves,” Sterling said, adding the latest discovery was in communication with existing wells.
Chief operating officer John Rapach said: "The initial A08 well results are already very encouraging and the planned stimulation offers the possibility of making this the most productive well in the field."
He added the results have also confirmed drainage areas in the northern part of the field and will help the partners to optimise the second phase of development at Breagh targeted for start-up in 2017.
Two more wells – A09 and A10 - along with possible sidetracks are being lined up for drilling in the third quarter, conditional on securing a rig, and could ultimately be brought online in the first half of 2016.
Despite the underperformance of Breagh, revenue from the southern North Sea field still helped Sterling to reverse a loss in the second quarter, reporting net income of $6.3 million versus a loss of $19.5 million a year earlier.
Similarly, the company recorded a first-half net profit of $175 million, compared with a loss of $28.4 million in the same period of 2013, as its results benefited from recognition of a deferred tax asset and disposal of part of a block in Romania, as well as revenue from Breagh in which it holds a 30% stake.