Ithaca Energy has said that the Galaxy II heavy duty jack-up rig, contracted by it to drill an appraisal well on the Stella field, has come on hire and been mobilised to the spud location and will commence drilling this month.
In November 2009, Ithaca Energy became operator of the rich gas-condensate, Stella field and two additional discoveries, namely Hurricane and Harrier. The company has since contracted the Galaxy II drilling unit, owned by Transocean, and the services of ADTI to manage appraisal well operations under ‘turnkey’ contract arrangements.
The well program, which is scheduled to take around 79 days to complete, has been designed to satisfy three primary objectives that will influence development, which include: confirming Ithaca’s assessment of the in-place volume of hydrocarbons, understanding changes in composition of hydrocarbon fluids with depth, and verifying the distribution and quality of the reservoir.
The company said that the drilling schedule includes drill stem testing and a contingent sidetrack to ensure that the well objectives are fully satisfied and field upside is appraised prior to development. A further update will be provided when the initial bore has been completed and prior to commencement of any sidetrack.
The appraisal well is planned to reach total depth in the Cretaceous chalk layers, which lie below the principal Stella (Andrew) reservoir target. An earlier well (30/6-3Z) encountered hydrocarbons in the Ekofisk chalk reservoir and tested further rich gas-condensate reserves, which could be developed at the same time as the main pool.
Ithaca said that timely development of Stella will allow it to consider the potential development of the neighboring Harrier and Hurricane discoveries as additional tiebacks to Stella in this gas-condensate area.
As reported in October 2009, Challenger Minerals (CMI) will pay 27% of gross Stella appraisal well costs in exchange for an 18% equity interest in the Stella and Harrier discoveries, thereby carrying a part of Ithaca’s share of drilling costs and leaving Ithaca with a 50.33% interest. Upon successful appraisal, CMI will also disproportionately fund a further Stella or Harrier development well.
The latest reserves report issued by Sproule International for year ended December 31, 2009, ascribed proved and probable reserves to Stella (both Andrew and Ekofisk reservoirs) of 8.94 million barrels of oil equivalent net to Ithaca after consideration of the CMI farmout.
Current joint venture partners in block 30/6 (Stella and Harrier) are Ithaca (68.33%), Dyas UK (31.67%), but post completion of the farm out to CMI will be Ithaca (50.33%), Dyas UK (31.67%), CMI (18.00%).