That question has now been comprehensively answered, with the 48/24-10z appraisal well, the sixth on the field, flowing 3,514 barrels of oil per day and 2.93 million cubic feet per day (4,000 barrels of oil equivalent per day). The wax content is 20 per cent but the crude is light (42 degree API) and highly mobile. In fact, the oil quality is better than expected; the company had thought the wax content would be slightly higher and did not expect the viscosity to be as low as 0.68 centipoises (which is lower than water) – this means the field could be a candidate for future water flood which would, the company says, “materially” increase recovery rates. Faulting is also relatively low compared to the overlying Seven Heads gas field, where unexpected compartmentalisation impacted production rates and sank project operator Ramco Energy.
Barryroe’s highly commercial flowrate – much higher than the 1,800 bpd anticipated and the 1,300 to 1,600 bpd delivered by earlier exploration and appraisal wells – came from only a 24 feet thick net pay interval in the oil-bearing basal Wealden sandstone (and rates were constrained by equipment limitations) with the upper gas-bearing basal reservoir section now being prepared for testing. High angle production wells could actually deliver even higher rates than this simple vertical well.
As a company briefing note puts it, “in layman terms, it’s bigger in overall size, thicker in reservoir intervals and with much better flow rates than we had hoped for”.
Importantly, the company says the well confirms that this basal sand reservoir is continuous and the oil water contact much deeper than previously thought. This all has implications for the reserve potential. The primary basal sandstone reservoir spans some 300 sq km, about the size of medium to large North Sea oilfield.
Chief executive Tony O’Reilly, who at last month’s oilbarrel.com conference delivered an upbeat assessment on the future for Ireland’s offshore industry after many decades of disappointment, said the well had confirmed that the basal sands were laterally continuous and highly productive. Prior to this well, RPS Energy gave the field P50 and P10 oil-in-place estimates of 373 million barrels of oil and 893 million barrels respectively. The 2C technically recoverable contingent resource was put at 59 million barrels. Providence has an 80 per cent interest alongside fellow AIM company Lansdowne Oil & Gas with 20 per cent (another AIM company, San Leon Energy, gave its 30 per cent interest in Barryroe to Providence in return for a 4.5 per cent net profit interest on the field).
Now work begins to move the field towards development using horizontal wells with artificial lift. The first step is to complete testing of the upper gas zone and suspend the well for future use. Development modeling will get underway, as will permitting. Providence is also seeking to bring in farm-in partners to reduce its capex exposure and ensure there are the right skills in place to handle the offshore development.
This is good news for the co-venturers, which both saw their shares advance on the news, and for cash-strapped Ireland, which in late 2010 took an IMF bailout to stave off bankruptcy. As O’Reilly told delegates at oilbarrel.com last month, the Irish offshore has seen a number of false dawns in recent decades, with sporadic bursts of exploration over that time yielding a number of discoveries but only the Kinsale Head, Ballycotton and Seven Heads gas fields have actually made it into production. That all changes with this positive oil test.
“There are a number of legacy discoveries offshore Ireland – unconventional and straightforward – that may now be taken much more seriously,” said analysts at Dublin stockbrokers Davy. “Providence is particularly well poised to avail of this opportunity with the foremost licence position offshore Ireland.”
Providence certainly plans to play the role of catalyst when it comes to the Irish offshore. Barryroe is the first in a two-year multi-well, multi-basin US$500 million drilling campaign, the largest ever offshore Ireland (Providence will be on the hook for US$80 to US$120 million of this). The potentially game-changing work programme, which will really put Ireland on the oil and gas map, will include a rank exploration well at Dalkey Island offshore Dublin (with a planned spud in Q3), an appraisal well on the Dragon gas field in the East Irish Sea, drilling on Rathlin Island in Northern Ireland and then the big stuff off the west coast, Spanish Point, where there’s a potential 200 million boe recoverable resource, and the “uber-giant”, Dunquin, which could hold 1.7 billion boe.
