Premier owns interests in eight producing fields in the UK. Following on from the Oilexco acquisition in 2009 and the EnCore acquisition in 2012, the portfolio also contains a number of current and future development projects, exploration acreage and a large pool of tax allowances which shelter producing cash flow from tax for the medium term.
In 2014, Premier's producing fields in the UK delivered a record 19,400 boepd, representing 31% of the group's total production. We expect our production from the UK North Sea to grow significantly in the medium term as we bring on-stream key projects, such as Solan and Catcher, in our development portfolio. Meanwhile, as part of our disposal programme of non-core assets, Premier completed the sale of Scott, Telford and Rochelle in 2014.
Premier's producing interests in the UK include:
- Balmoral area
The Balmoral area fields - Balmoral, Stirling, Brenda & Nicol - are located in Blocks 16/21a and 16/21b in the UK Central North Sea, 200 kilometres northeast of Aberdeen. We acquired our interest in the Balmoral area fields through our acquisition of Oilexco in 2009. The Balmoral area fields produce via the Premier-operated floating production facility located on the Balmoral field. Oil is transported via the Brae-Forties link to Cruden Bay and overland to Hound Point.
We also derive benefit from the Burghley and Beauly third party fields utilizing the Balmoral area infrastructure.
Field % Interest Status Balmoral 78.11 Producing Stirling 68.68 Producing Brenda 100 Producing Nicol 70 Producing
- Wytch Farm (30.1% non-operated interest)
Wytch Farm is Europe's largest onshore oil field. In December 2011, we completed the acquisition of an additional 17.715% interest in Wytch Farm, taking our total interest to 30.1%. There is an active on-going infill drilling programme at Wytch Farm, which was initiated in the first quarter of 2012. Drilling activity is targeting infill locations in producing fields as well as undeveloped satellite accumulations.
Premier's partners in Wytch Farm are Perenco (operator), Maersk, Ithaca and Talisman Sinopec. The Wytch farm partners also have interests in the offshore Beacon discovery, which has estimated 2C reserves of 1.9 mmboe net to Premier.
- Kyle (40% non-operated interest)
In 1995, Premier acquired a 20% interest in the P748 licence, which contains the Kyle oil field, through its acquisition of Pict. Between 1997 and 2002, we acquired additional equity interests in the Kyle field taking our total interest to 40%.
The Kyle field has been developed via sub-sea wells connected to two manifolds (North and South) tied back to the Banff FPSO. Oil and gas production from the Kyle field began in 2001. Due to exceptionally bad weather in December 2011, the Banff FPSO moved off location. The vessels anchors, risers and subsea infrastructure were severely damaged. The FPSO was removed from the location to effect repairs and the subsea infrastructure replaced. The work on the vessel was successfully completed in 2014 and Kyle was brought back on stream in July that year.
- Huntington (40% non-operated interest)
Premier acquired a 40% non-operated interest in the Huntington light oil field in 2009 as a result of the Oilexco acquisition. A field development plan was sanctioned in November 2010 together with the execution of an FPSO charter party agreement.
First oil from the Huntington field was achieved on 12 April 2013. At peak production, the field was producing at rates of 25-30 kbopd (gross). Oil is exported through offshore loading to shuttle tankers while gas is exported via CATS System and redelivered at the Teesside Gas Terminal where it is sold.
The other owners in the Huntington field are E.ON Exploration and Production (25 per cent, Operator), Noreco (20 per cent) and Iona Energy (15 per cent).
Significant UK projects include:
- Solan (100% operated interest)
The Solan oil field was discovered in 1991 by Hess and relinquished. The discovery was further appraised by Chrysaor with two wells in 2008 and 2009.
In May 2011, Premier acquired a 60% equity interest in the Solan field and, in April 2012 approval of the Solan Field Development Plan was granted from DECC.
Drilling of the four development wells - two producers and two water injectors - commenced in April 2013 with the first pair completed in the summer of 2014. Onshore construction of the subsea storage tank, jacket and topsides was completed in 2014 with the facilities installed during August and September 2014. Commissioning of the facilities, which commenced in November 2014, was hampered by poor weather in the North Sea and low productivity over the winter period. However, better progress has since been made and, as planned, the Victory flotel was replaced with the Siem Spearfish ‘walk-to-work’ vessel, providing continuity of resources on the platform until the larger Regalia flotel arrives in August. Following the successful tie-in of the first pair of producer-injector wells, commissioning of the sub-sea infrastructure commenced in June and remains on-track for completion in September. Drilling of the second pair of producer-injector wells commenced in July. First oil continues to be targeted for the fourth quarter of 2015. Once on-stream, the field is expected to produce approximately 40 mmbbls with a plateau rate of between 20-25 kbopd.
In May 2015, Premier successfully acquired Chrysaor's 40 per cent interest in the Solan field for nil upfront consideration and entered into an agreement with FlowStream whereby a US$100 million payment was received in return for the proceeds from 15 percent of production from the field for a period of time. As a result, partner funding concerns around the Solan project have been removed while, at the same time, the Group’s balance sheet exposure to the project has been reduced.
View photographs of the Solan project
- The Catcher Block (50% operated interest)
The initial Catcher well drilled in May 2010 encountered good quality Cromarty reservoir with an estimated net oil pay of 27 meters. A follow up side-track well, Catcher East, also encountered excellent quality oil bearing sandstones and a common pressure regime. Phase 2 of the Catcher area exploration campaign was completed in late 2010 and early 2011 with successful discoveries in Varadero and Burgman. In June 2012, the Carnaby well, which was the first well to be drilled on the western part of the block, encountered good quality oil. It is expected that the Carnaby discovery will contribute as a future tie back to the Catcher development. Most recently, in April 2013, the Bonneville exploration well and its side track discovered oil. The estimated oil in place from the Bonneville discoveries is approximately 30 million barrels which is in line with pre-drill predictions. It is anticipated that the discoveries will be tied back to the Catcher field development.
As a result of the EnCore acquisition, which completed in January 2012, we increased our interest in the Catcher area by 15%, taking our overall interest in the project to 50%. We also acquired operatorship of the project.
The development concept was formally agreed by partners in December 2013 and government approval was received in June 2014. The project is expected to produce 96 million barrels of oil equivalent with a peak production rate of around 50,000 barrels of oil per day.
The project will entail the drilling of 22 subsea wells (14 producers and 8 water injectors) on the Catcher, Varadero and Burgman fields which will be tied back to a leased FPSO. The oil will be offloaded by tankers while the gas will be exported through the SEGAL facilities.
All major service contracts have been awarded and the project is now in the execution phase. Subsea installation work has commenced with two templates already installed and gas export pipe lay underway. The Ensco rig is now on hire and development drilling commenced in July. Construction of the FPSO remains on-going with the mating cone module completed and delivered to the hull fabrication yard. The Premier-operated Catcher project remains within budget and on schedule for first oil in 2017.
View Catcher Video
Exploration in the UK North Sea will continue to focus on near-field prospects close to its existing developments and producing assets. In particular, preparation is under way to drill an exploration well at the Laverda prospect to the North of the Catcher area hub in 2016. Work also continues on the Bagpuss and Blofeld heavy oil prospects.
P1943 (37.5% operated interest)
In August 2013, Premier farmed in for a 37.5% interest in Blocks 13/24c and 13/25, which contain the Bagpuss and Blofeld prospects. The prospects, which Premier evaluate to be heavy oil targets, are located on the Halibut Horst which is a well-defined basement high within the Moray Firth. Analysis of the 1981 discovery well result suggests that the Bagpuss and Blofeld prospects together could contain up to 2 billion barrels of oil in place. It is envisaged that an initial well on one of these features will spud in the first half of 2016.
Access to Premier's Oil and Gas Infrastructure
The infrastructure code of practice is a voluntary arrangement developed by Oil & Gas UK in consultation with DECC. Under the arrangement, operators have agreed to publish high level capacity, technical and commercial data about the pipelines and facilities that they operate on the UK Continental Shelf in order to facilitate the utilisation of such infrastructure, by prospective third party users, for the development of remaining UKCS reserves.
The Balmoral FPV is a purpose-built GVA 5000 semi-submersible production vessel. It was installed over the Balmoral field in 1986 and moored over a 14-slot subsea template through which a number of wells had been pre-drilled. First production occurred in late 1986.
The FPV mooring system consists of 8 adjustable-tension anchor chains attached to piles. The topsides facilities include fluid separation and processing facilities, power generation, gas compression and a 116-man living quarters. Total vessel displacement is about 34,000 tonnes. The system utilises dynamic risers for the receipt of production fluids and the export of processed oil. The vessel does not have any drilling facilities installed.
Maximum design throughputs are approximately 60,000 bbl/day oil production and 90,000 bbl/day produced water handling.
The vessel has no oil storage capability and oil is exported to Cruden Bay via a 14km 14" diameter pipeline to the Brae and Forties Pipeline System. There is no gas evacuation route and gas processed on the FPV is used for fuel and gas-lift, with the surplus flared. In addition to Balmoral, production from the Glamis, Stirling, Beauly, Brenda, Nicol and Burghley satellite fields is processed and exported via the FPV.
Capacity Information (Annex E Data)