Australia-based junior Spark Exploration is hoping to make a splash in the UK’s emerging West of Shetland basement play and has won financial backing from compatriot investment bank Macquarie Bank to help fund early exploration.

Perth-based Spark picked up two West of Shetland licences in last year’s 30th Offshore Licensing Round.

These are located on the Rona Ridge geological feature, next door to acreage where UK-listed Hurricane Energy has spearheaded exploration and is about to launch a closely watched early production system (EPS) using the Aoka Mizu floating production, storage and offloading vessel to test the commercial viability of the fractured basement play.

Spark holds 100% of its licences, which lie between Hurricane’s discoveries in the south and BP’s Clair field in the north, and could consider bringing in partners.

"We believe that we potentially have a tiger by the tail with Bader having the potential for more than a billion barrels recoverable,” said managing director Matt Szwedzicki, who is joined on Spark’s executive team by West of Shetland veterans Jim Jordan and Mark Pay.

Spark said its licences contain an “exciting mix” of a large basement prospect in the same play as Hurricane’s Lancaster and Halifax discoveries, as well as conventional prospects in Devonian-Carboniferous and Lower Cretaceous sands.

The stand-out basement prospect is Bader, named after British World War 2 fighter pilot Douglas Bader, in keeping with Hurricane's policy of naming its discoveries in the area after World War 2 planes.

Bader has been independently assessed by consultancy RPS as potentially holding between 676 million and 1.28 billion barrels of mean recoverable prospective resources, with the different scenarios dependent on whether or not it is found to be independent or connected to Halifax.

“We were pleasantly surprised in the last licensing round to see that there was still some available acreage on the Rona Ridge — and it happens to be along trend of, and between, two world-scale accumulations,” said Szwedzicki.

"Bader is a very significant basement structure which looks particularly attractive when put into context of Hurricane Energy’s recent... Halifax discovery next door.

"Hurricane has done an amazing job in opening up this new play in the UK. Along with the rest of industry we await their EPS success, and we certainly believe there is more potential in the basement along this ridge.”

Szwedzicki said Spark has strong support from its shareholder base, which includes a number of specialist resource backers, including Sydney-based Macquarie as a “cornerstone investor”.

Spark is fully funded for its initial two-year work programme, which involves a commitment to reprocess 3D seismic data and carry out geological and geophysical studies.

It has a drill-or-drop decision to make by September 2020.

“Given the early industry interest and the sheer potential size of our prospects, we will consider finding the right partner to join us and will be running a structured farm-out process starting during the second quarter of 2019,” said Szwedzicki.

Spark has licensed TGS 3D and long offset 2D seismic covering over 100 kilometres of the Rona Ridge, which Szwedzicki said offers the “best quality” data across its licences.

Technical director Mark Pay said: “Industry’s perception of the basement play is already beginning to shift, as demonstrated by the recent Spirit Energy deal with Hurricane’s Greater Warwick Area, and is bound to change significantly if Hurricane's EPS is successful.

“Historically there has been some scepticism on the play in the UK, despite success elsewhere in the world. However, very shortly we expect to see its viability demonstrated off the UK.”

Spark’s conventional targets include Ginger, which could hold up to 200 million barrels of oil. Ginger is named after Tom “Ginger” Neil, another Battle of Britain pilot.

Last September, Spirit Energy provided an endorsement of the potential of the fractured basement play when it agreed a farm-in deal with Hurricane that could see it invest close to $400 million in Hurricane’s Greater Warwick Area.

A string of discoveries by Hurricane containing large amounts of oil along the Rona Ridge have created excitement but it remains unclear exactly how much of the oil can be recovered.

Hurricane hopes those questions will be answered by the Lancaster EPS.

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Spark to shine light on West of Shetland play