Angus begins production at Lidsey, though flow disappoints

The AIM-traded firm said that, following the drilling and completion of the Lidsey-X2 horizontal production well, it was working through the production start-up and production had now been initiated.

Initial start-up rates of production from the Great Oolite reservoir were coming in at 40 barrels of 38.5 API of dry oil per day.

The fluid column extended to 322m from surface, with a measured static bottom hole pressure of 764 psi.

Angus said the Great Oolite was the first of three reservoirs with potential viability in Lidsey-X2, as stated in its announcement on 6 November.

“Compared to pre-drill assessments set forth in the competent person's report [in the] 7 November 2016 admission document, flow rates from the Great Oolite reservoir are below expectations, and work is continuing to clean up the well,” the board of Angus Energy noted.

“The company is investigating the new geological and borehole information to update its understanding of the reservoir.

“In addition, the company is currently examining evidence that suggests a partial flow reduction is the result of a hole in the production tubing, therefore not allowing the well to be fully drawn down.”

Angus said it was conducting further analysis and if confirmed, it would undertake operations to repair the tubing, which would allow maximum draw from the reservoir.

That would be the priority for the company over the coming weeks, the board confirmed.

In addition to any necessary repair, the board also said industry information and technical guidance on analogous wells in the region suggested initial flow rates could be improved.

Angus Energy added that it believed initial flow rates from Lidsey-X2 had similar potential for increased yield.

Therefore, the company was conducting a “thorough study” to optimise and enhance production levels from the Great Oolite.

“Production has now commenced from Lidsey-X2,” confirmed managing director Paul Vonk, adding that the project “was delivered on time and on budget”.

“Even with these initial flow rates, Lidsey-X2 provides commercial production and cash flow.

“We will continue to optimise production from the Great Oolite reservoir at Lidsey as we work to increase flow rates and we look forward to developing its additional reservoirs to enhance long run value for our shareholders.”