Serica Energy encounters 'difficulties' at Columbus well

The AIM-traded firm said a 5,900 foot horizontal section was drilled through the reservoir formations of the upper Forties, and encountered a sequence of sands and shales, in line with pre-drill expectations.

It said the well required sand screens to be installed to prevent fine particles being produced, but “difficulties” were encountered while running the screens, meaning it was ultimately not possible to install them.

As a result, the reservoir section of the well would now be side-tracked and re-drilled, using data collected during initial drilling to optimise its trajectory and avoid the difficulties encountered running the screens in the original well.

The additional operations were expected to take three to four weeks at a net cost to Serica of about £3m.

Serica said the operations were not expected to affect the timing of production start-up, which was still expected during the fourth quarter of 2021.

Separately, the company said the R3 well had now been cleared of all equipment installed when it was originally completed in 2005.

Reservoir access had been regained, thus allowing new completion equipment to be run in preparation for production.

The new completion was currently being installed prior to performing a flow test on the well, which was expected to be carried out in June.

A diving support vessel was contracted to install the subsea control equipment required, so the well could start producing in the third quarter of 2021.

“Whilst frustrating, the additional operations on Columbus are not expected to affect the timing of first production,” said chief executive officer Mitch Flegg.

“The economic returns of the project remain very attractive for the company.”

At 1216 BST, shares in Serica Energy were up 1.04% at 116.2p.