Premier owns interests in nine producing fields in the UK. Following on from the Oilexco acquisition (see press release) in 2009 and the EnCore acquisition (see press release) in 2012, the portfolio also contains a number of current and future development projects, a significant spread of exploration acreage and a large pool of tax allowances which shelter producing cash flow from tax for the medium term.
In 2013, Premier's producing fields in the UK delivered 14,900 boepd, representing 26% of the group's total production. We expect our production from the UK North Sea to grow to significantly in the medium term as we bring onstream key projects, such as Catcher and Solan, in our development portfolio.
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 (see press release) 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.
Premier owns and operates a number of other accumulations in the area which are expected to be developed via production well tie-backs to the Balmoral FPV. These include the Caledonia field (Premier - 100%) and the Ptarmigan discovery (Premier - 60%). We will also benefit from 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 Caledonia 100 Re-development
- Wytch Farm (30.1% non-operated interest)
Wytch Farm field 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% (see press release). An infill drilling programme at Wytch Farm, which was initiated by the new operator in the first quarter of 2012, has resulted in the completion of three new wells and seven workovers. The operator now operates two rigs simultaneously at Wytch Farm. Premier believes that sufficient reserves-adding opportunities exist to sustain an active rig programme. 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 and Talisman Energy Inc. The Wytch farm partners also have interests in the offshore Beacon discovery, which has estimated 2P reserves of 2.7 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 an FPSO. Oil and gas production from the Kyle field began in 2001. Due to exceptionally bad weather in December 2011, the Banff FPSO – which handles Kyle production – lost anchors and the risers were damaged severely. Since then, the Banff FPSO has been off location while repairs are undertaken. These are expected to complete shortly, and the FPSO is expected to be back on location during Q1 2014, allowing production to restart during Q2/3.
- Scott & Telford (21.83% & 1.59% respectively, non operated interests)
The Scott field has proven to be one of the larger and more productive oil fields to be found on the UKCS. We acquired a 1.798% equity stake in the 15/21 licence as part of our acquisition of Pict in 1995. In May 2007, we successfully pre-empted Hess's proposed sale of its interest in part of the Scott field increasing our holding to 21.83% (see press release).
The Telford field lies immediately to the south of the Scott field, with the Scott platform supplying processing and injection facilities. Our interest in the Telford field was increased from 0.8% to 1.59% in December 2010, when we pre-empted the purchase by Dana Petroleum of Suncor's interest in the field.
Our partners in Scott are Nexen (operator), Petro-Canada, Apache and Maersk.
- Huntington (40% non-operated interest)
We acquired a 40% non-operated interest in the Huntington light oil field in 2009 as a result of the Oilexco acquisition (see press release). A field development plan was sanctioned in November 2010 together with the execution of an FPSO charter party agreement (see press release).
During 2011, Sevan Marine, the FPSO contractor, suffered financial difficulties. Teekay subsequently agreed to acquire the Voyageur Spirit FPSO from Sevan Marine, and financed the completion of the upgrade of the vessel.
First oil from the Huntington field was achieved on 12 April 2013 (see press release). The field is expected to produce at a plateau rate of 25-30 kbopd (gross). Oil is exported through offshore loading to shuttle tankers while gas is exported via CATS to the Seal Sands terminal at Teesside.
The partners in the Huntington field are Premier (40 per cent), E.ON Exploration and Production (25 per cent, Operator), Noreco (20 per cent) and Iona Energy (15 per cent).
- Rochelle (15 %, non-operated interest)
Rochelle is a gas condensate project in the Central North Sea, discovered in 2000 and successfully appraised in 2009 by Endeavour, the operator of the licence at the time.
We acquired an interest in the area via the drilling of the successful West Rochelle well in a neighbouring block in 2010 (see press release). Formal approval for the development was granted by the UK government in December 2011. The subsea pipeline and umbilical installation programme and upgrades to the host Scott platform were completed earlier in 2013. In July 2013, operatorship of the Rochelle field transferred to Nexen, who also operate the Scott platform.
In the first quarter of 2013, the East Rochelle well, the first of the two development wells, was damaged during a storm. As a result, the Prospect rig moved to drill the West Rochelle well, which was completed and tested in June 2013, and production commenced in October 2013. The rig returned to drill the East Rochelle well in July which was successfully completed and tied back to the Scott platform in early 2014. Once fully ramped up the field is expected to produce at a rate of around 2,500 boepd net to Premier.
Significant UK projects include:
- Solan (60% 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 signed a sale and purchase agreement under which it acquired a 60% equity interest in the Solan field (see press release) and, in April 2012, received approval of the Solan Field Development Plan from DECC (see press release).
Drilling of the four development wells - two producers and two water injectors - commenced in April 2013. Drilling operations were suspended as planned between November 2013 and March 2014 for the winter period and the rig sublet elsewhere. Construction of a subsea storage tank is under way and is targeted for sail away in mid-2014. Construction of the topsides and jacket, which started in June 2012, is progressing in Scotland to meet sail away and installation by the Thialf Heerema vessel in mid-2014. Hook up and commissioning is planned to be undertaken prior to the end of the summer weather window West of Shetlands ahead of first oil, scheduled for the fourth quarter of 2014.
The field is expected to produce approximately 40 mmbbls with an estimated initial production rate of 24,000 bopd following ramp up. Chrysaor is Premier's partner in the field with an equity stake of 40%.
View Solan Video
- 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 (see press release). A follow up sidetrack, Catcher East, also encountered excellent quality oil bearing sandstones and a common pressure regime (see press release). Phase 2 of the Catcher area exploration was completed in late 2010 and early 2011 with successful discoveries in Varadero (see press release) and Burgman (see press release). 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 (see press release) 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 (see press release). 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 (see press release), 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.
Tenders for the well systems, Christmas trees and a heavy duty jack-up rig were received in July and August 2013 and have been fully evaluated. It is envisaged that development drilling, which will entail the continuous drilling of up to 14 producers and 8 water injectors, will commence in 2015 and continue beyond first oil.
Subsea FEED for the project was completed in the first half of 2013. EPCI bids for the subsea facilities were received in October 2013 and bid evaluation is on schedule to meet the April 2014 target date for contract award. The funded tender process for the construction and operating contract for the FPSO was initiated in the first half of 2013 and is near to completion with final offers from three FPSO contractors evaluated by a dedicated commerical team and a preferred bidder identified. A draft development work program and budget has been issued to partners and the FDP submitted to DECC, initiating the process to target sanction in the second quarter of 2014.
Capital expenditure for the field is estimated at US$2.2 billion including 30% allowances and contingencies. Gross reserves under the initial development scheme are 92 mmboe. The development scheme makes provision for the tie-back of additional disoveries in the future.
Premier has interests in more than 40 exploration licences in the UK North Sea.
- P1430 (50% operated interest)
In April 2013, Premier discovered oil at Bonneville on the important Premier-operated Catcher licence in the UK Central North Sea. The estimated oil in place from the Bonneville discoveries is approximately 30 million barrels which is in line with pre-drill predictions and it is anticipated that the discoveries will be tied back to the Catcher field development.
- P1181 (20.20% non-operated interest)
In July 2013, the exploration well targeting the Lacewing prospect encountered a gas column of greater than 100 feet in the Triassic interval and confirmed reservoir quality sands. Post well evaluation work is progressing to ascertain whether commerciality can be established.
- 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 evaluates 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 2015.
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)
Premier Oil plc
53 Blenheim Place
+44 (1224) 618900
Shelley Field Decommissioning
The Shelley field is located in Block 22/02b and 22/03a of the United Kingdom Continental Shelf (UKCS), approximately 192km from the northeast coast of Scotland and 32km from the UK/Norway median line.
The Shelley field facilities comprised of two production wells with Christmas trees and fishing-friendly protective structures, and a subsea production manifold inside a protection structure. These were tied back to the Sevan Voyageur FPSO by a trenched and rock dumped 8" production pipeline and a trenched electro/hydraulic control umbilical, which were located in a 10m wide corridor between the production manifold and the FPSO. Premier sought cessation of production in July 2010.
The Decommissioning Programme was submitted in accordance with the requirement of the Petroleum Act 1998 and approved in June 2010. Programme 1 covered the FPSO, manifold and wells, while Programme 2 covered the pipeline, umbilical and jumpers. The associated decommissioning activities were completed during 2010 and 2011, and the Decommissioning Close-Out Report was subsequently approved by DECC in April 2012.