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  • Oil Search (OSH) has successfully completed well tests at the Nanushuk reservoirs in Alaska and will be leaving the project until market conditions improve
  • The company now has a strong understanding of the geology and potential productivity of the reservoirs
  • Now that the testing has been completed at both reservoir locations, Oil Search has started to demobilise its crew and is expecting everyone to be off-site by mid-April
  • Due to the current oil prices, Oil Search has decided to delay the Final Investment Decision date for the Pikka Unit Development
  • Currently, Oil Search does not have any plans for drilling in the 2020 to 2021 winter season
  • On market close, Oil Search is up 2.15 per cent and is trading at $2.38 per share

Oil Search (OSH) has successfully completed well tests at the Nanushuk reservoirs in Alaska and will be leaving the project until market conditions improve.

The company has completed the testing of the Mitquq 1 ST1 and the Stirrup 1 wells.

Both wells were digged, logged, cored and flow tested. The flow tests included a clean-up, flow period and a pressure build-up, before the final flow test to assess the deliverability of the well.

Mitquq 1 ST1

Mitquq 1 ST1 is located nine-kilometres east of the proposed central processing facility of the Pikka Unit Development.

The company encountered a net pay zone of 52.5 metres with a gas cap of nine metres. In the test, the well flowed at a rate of 1730 barrels of oil per day (bopd) from a single stimulated zone.

Stirrup 1

The Stirrup 1 exploration well is located 12 kilometres west of the Horseshoe discovery well and 35 kilometres southwest of the proposed Pikka Unit development infrastructure.

At this well, the company encountered an oil column with a net pay of 23 metres. In the test, Stirrup 1 flowed at a rate of 3520 bopd from a single stimulated zone.

The two Mitquq (Mitquq 1 and Mitquq 1 ST1) and Stirrup 1 oil discoveries, together with the Mitquq 1 ST1 and Stirrup well tests, have shown the company valuable information regarding the geology and well productivity of Nanushuk.

Managing Director Keiran Wulff is pleased with the success from the 2019-2020 Alaskan exploration program.

“We now have a strong understanding of the geology and potential productivity of the prolific Nanushuk play that underlies our portfolio of leases on the North Slope, which could add substantial resource and value to the Pikka Unit Development,” he added.

Demobilising

Now that the testing has been completed at both well locations, Oil Search has started to demobilise its crew and is expecting everyone to be off-site by mid-April.

Due to the current market conditions, Oil Search has decided to delay the Final Investment Decision date for the Pikka Unit Development.

“The additional time will allow further value engineering and optimisation of the development to take place, with a focus on reducing the break-even of the project, and the integration of the results of the Mitquq and Stirrup wells,” Keiran said.

“While further appraisal will be required, these new discoveries may represent low-cost tie-back options to the proposed Pikka Unit Development,” he added.

The company said it is well placed to minimise capital expenditures in Alaska during this challenging time within the oil and gas industry.

Currently, Oil Search does not have any plans to pursue an exploration drilling program in the 2020-21 winter season.

It will focus on maintaining capabilities, advancing work needed to comply with permitting obligations and pursuing opportunities to minimise costs and add value to the Pikka Unit Development.

“This will enable the company to respond quickly when oil prices improve. The company remains committed to progressing the Pikka Unit Development,” Keiran said.

“Given the proximity of our acreage to existing infrastructure and the proven prospectivity of the Nanushuk play, we remain very excited about the opportunities for Oil Search in Alaska and are well prepared to deliver the world class Pikka Unit Development when market conditions improve,” he added.

On market close, Oil Search is up 2.15 per cent and is trading at $2.38 per share.

OSH by the numbers
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