Cluff seeking farm-out partner at Dewar Prospect

The AIM-traded firm said an early stage feasibility study, carried out by io oil and gas consulting, had identified a viable development scenario based on a two-well subsea development tied back to the BP-operated Eastern Trough Area Project (ETAP) central processing facility, five kilometres to the north west of the prospect.

Other potential offtake options were also identified as part of the study.

On that basis, Cluff said the Dewar project was estimated to have a post-tax net present value of £555m at a 10% discount, and a post-tax project internal rate of return of 123%, in a P50 prospective resource scenario.

The company said it would now look to reduce its 100% working interest in the Dewar Prospect, confirming it had started a formal farm-out process with the aim of attracting one or more partners to provide funding for future exploration of the block.

Cluff said it believed the prospect to be drill-ready, and expected a farm-out to be supported by a commitment to drill an exploration well on Dewar.

Looking at the Dewar Prospect, Cluff noted that it was awarded a 100% working interest in licence P2352, located in a mature part of the Central North Sea, during the 30th Offshore Licencing Round in 2019.

It said its prospect evaluation had been based on access to recently re-processed 3D seismic data and drilling results, which were unavailable to previous licence holders.

The Dewar Prospect was estimated to contain up to 272 million barrels of light oil, with P50 prospective resources of 39.5 million barrels in the forties sandstone.

Cluff said the geological model was supported by a clear amplitude-versus-offset (AVO) anomaly, with a geological chance of success estimated at 41%.

The prospect is located in 90 metres of water, and could be drilled with a heavy duty jack-up rig.

Exploration well costs were currently estimated at approximately £17m gross, including a 15-day well test.

“The Dewar prospect represents a significant and valuable exploration target which is located in close proximity to existing production infrastructure,” said chief executive officer Graham Swindells.

“The successful farm-out of two of our Southern North Sea licences to Shell earlier this year has led to a growing recognition of our technical team within the industry and provides a great platform from which to launch this next farm-out process.

“We continue to invest in progressing the licences awarded in the 30th Offshore Licencing Round and remain focussed on building a portfolio of exploration and appraisal assets of varying levels of maturity which will provide further drilling opportunities, in addition to the Selene and Pensacola Prospects recently farmed out with Shell.”