Although operator Chevron classed the P2-10 well as a tight hole and was not releasing any information about the outcome of the drilling operation, Xtract Energy, which has a royalty interest in the block, has disclosed that the well has in fact made a gas discovery.
In a London Stock Exchange statement, Xtract said that the Noble Byron Welliver jackup rig has just completed activity at the P2-10 well location.
Xtract's information has come from TNO, the Geological Survey of the Netherlands: “Xtract can confirm from the website managed by TNO, the Geological Survey of the Netherlands, at the request of the Dutch Ministry of Economic Affairs, Agriculture and Innovation, that the P2-10 appraisal well result is listed as 'gas',” Xtract disclosed today.
Through 100% owned subsidiary Elko Energy, Xtract holds holds a 5% royalty interest in gas-bearing blocks P1 and P2 in the Dutch North Sea.
Under a September 2010 licence deal, Chevron Exploration and Production Netherlands purchased Elko's 60% equity interest in blocks P1 and P2 and Elko agreed to take 5% of the sales value from Chevron gas delivered into the Dutch National Transmission System and Chevron condensate delivered onshore as part of the deal. Chevron paid €4.3 million in cash for previous costs, and the transaction and transfer of operatorship to Chevron completed in December 2010. Elko held a 60% interest in the two licenses, with the Dutch State company, Energie Beheer Nederland, as its participating partner.
Estimated reserves in blocks P1 and P2 have been put at more 250 billion cubic feet in Slochteren sands, while additional identified prospects were thought to contain another 500 bcf, according to an independent engineering report by Tracs International in 2008
Two years ago in June 2010, an updated independent competent persons report was prepared by Tracs which examined existing gas discoveries and prospects on blocks P1 and P2 to quantify the resource base. After five confirmed discoveries, contingent resources have been estimated at 280 bcf (46.67 million barrels of oil equivalent) net to Elko.
Block P1 lies on the southern margin of Southern Permian Gas basin, and covers approximately 209 square kilometres. Seven wells have been drilled there by previous operators, and five have hit gas. Block P2 is adjacent and east of block P1 and covers approximately 416 sq. km.