I have pasted a previous post of mine (dated 23/8/05)regarding the North Sea which you might find useful.
*************************************** In September 2004 Nido acquired 3 highly prospective exploration blocks in the UK North Sea. The three blocks contain proven gas reserves and are in close proximity to gas production and pipeline infrastructure.
In 2005 Nido has applied for 3 further blocks in the North Sea. It is expected that an announcement will be made within 5 weeks if Nido has been successful in their bid for further North Sea acreages.
The UK North Sea presents a real opportunity for Nido. The North Sea is the major supplier of gas to the UK. At present demand is growing so rapidly in the UK and is outstripping gas supply. Gas prices are also rising rapidly and are expected to remain linked to oil prices. Currently gas is close to (US)$10/million BTU.
The existing three Blocks are Block 48/1a, Block 48/2b and Block 47/9c.
Nido has farmed – out a 50% interest to Norwest Energy for blocks 48/1a and 48/2b. Nido will retain operatorship of the blocks.
Nido has farmed – in a 50% interest with Corsair Petroleum for block 47/9c. Corsair will retain operatorship of the block.
According to Nido's 2004 annual report and 2005 annual general meeting presentation, we must be very close in getting an update on the gas-in-place volume estimates – as the gas bearing structures and the petrophysical analysis of open hole well logs and core data should be almost completed.
I thought that it might be timely to speculate on the gas -in-place estimates of the fields and hopefully it may create some further discussion.
Blocks 48/1a and 48/2b Nearby Hoton and Hyde are considered good analogous models both of which have been successfully developed with reserves in the range of 60 and 110 Bscf.
Block 47/9c Nearby Mercury and Helvellyn are considered good analogous models both of which have been successfully developed using horizontal wells with reserves in the range of 50 and 100 Bscf.
Nido's interest in both blocks is 50%.
Hence, Nido's interest in both blocks ranges from 55 and 105 Bscf (potential to be drilled out of both blocks).
Assuming the price of gas is US$10/mcf
Minimum Revenue to Nido will be 55x10=(US)$550 Million of potential gas sales Mximum Revenue to Nido will be 105x10=(US)$1.05 Billion of potential gas sales
Drilling is expected to commence in 2006 and gas production in 2007.
As future revenue is calculated on current gas prices, who knows what the price of gas will be in 2 years time. Given the current trend it is very likely that gas prices will be a lot higher than (US)$10.
*********************************** The following extracts from various sources may also provide you with some insights:
corsair petroleum have said recently (extract from their website)-Minimum in-place volume required for commerciality is 30 Bscf, which is expected to be comfortably exceeded. (Block 47/9C)
Norwest Energy mentioned the following statement at the good oil conference last month (see Norwest's announcement)-"Potential to add significantly to share price" (blocks 48/1a and 2b)
At the same Conference Nido stated that "progress in the UK regarding these blocks was progressing very well.
Also in the half yearly report (last month) stated that...
The initial result of this work is a new structural model for the reservoir, which indicates the potential for a larger structure and increased gas volumes at the primary Rotliegendes sandstone level. A potential, secondary reservoir target has also been identified in the deeper Carboniferous section. Structural mapping will be completed during the June quarter.
Finally, DW is heading to London this week to attend a series of technical and operator committee meetings in to finalise a work program for block 47/9c. This was also mentioned in the Half Yearly Report.
PS. The quote from DW below was mentioned in an email regarding specifically to a question I asked about the North Sea. Need I say anything more!!!!
NDO Price at posting:
0.0¢ Sentiment: None Disclosure: Held
