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cashinmattress

Uk E&a Drilling Sinks To 45-Year Low

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AT MID-YEAR, the 2011 UK exploration and appraisal (E&A) well count is the lowest it has been for an incredible 45 years. Not since H1 1966 has the tally been lower.

It appears that something has gone badly wrong in the UK sector and there is a need to kick-start re-investment in the North Sea where significant resource remains untapped.

Just eight exploration and appraisal wells are currently operating on the UK Continental Shelf (UKCS), an increase of one well in the last month.

The 2011 tally so far is 18 well starts (11 new spuds and seven sidetracks) comprising four exploration spuds and one sidetrack and seven appraisal spuds plus six sidetracks.

Some 22 production/development wells are operating, including batch drilling programmes utilising 10 mobile units, the remaining operations being conducted from existing platform facilities.

Two rigs are active West of Shetland (WoS). Chevron’s well 217/15-1Z is being abandoned following which the drillship Stena Carron is expected to move to block 204/10a to further appraise the Cambo discovery.

The disappointing result from the 260-plus Lagavulin programme will have influenced the drill-or-drop decision on the nearby Talisker prospect on block 217/4a, which was a potential follow-on to Lagavulin.

Also West of Shetland, BP spudded south-west Clair field appraisal well 206/12a-3 on June 9 with the rig Byford Dolphin, which had been production well drilling on the company’s Central North Sea (CNS) Kinnoull field on block 16/23a.

In the Northern North Sea (NNS), the semi-submersible Sedco 714 remains on protracted abandonment operations on Total’s Oban prospect – well 3/15a-14, following a DST (drill-stem test). The rig is expected to head to the West of Shetland sector to re-enter Total’s late-2010 Edradour discovery, well 206/4-2, to conduct flow tests.

The Transocean Prospect has now completed delineation of Sterling’s Cladhan field and moved to the CNS. Although not the giant accumulation hoped for prior to the latest appraisal programme, more oil was located. Well 210/30a-4X encountered oil. Further appraisal is mooted for early 2012.

Four rigs are working in the CNS. Maersk’s second geological sidetrack, well 22/25a-10Y on the Culzean accumulation, is ongoing using the jack-up Ensco 101.

BG’s Jackdaw appraisal well 30/2a-8 using the jack-up Gorilla VI remains at or close to total depth more than 330 days since spudding in early August 2010.

The second of Maersk’s two active wells in the CNS is the Courageous appraisal, Well 30/2a-9Z, with the Noble Ton van Langeveld semi-submersible.

The geological sidetrack, now one month in, immediately followed the 23-day initial leg.

On June 17, Nexen spudded Hobby North appraisal well 14/26a-9 using the semi- Transocean Prospect.

This is the first well on block 14/26a following Nexen’s acquisition of the acreage from BG, enabling the Lower Cretaceous reservoir to be evaluated to the north of prolific block 20/1.

In the Southern North Sea just one exploration well remains active. The Ensco 80 jack-up is drilling Tullow’s well 44/19b-7A on the Carboniferous Cameron Prospect, 50 days since a re-spud was necessitated.

Turning to the 45-year low, it is difficult to determine any single factor as to why this is the case, particularly given the prevailing buoyant oil price. While UK budget changes will have impacted potential rates of return for the larger players who allocate resources worldwide, seeking the best potential return; this is nothing new.

Other factors are most certainly in play. Besides DECC scrutinising drilling applications more closely, it seems likely that many of the smaller companies that are deemed so important to revitalising the North Sea have and will continue to struggle against a backdrop of diminished corporate value in light of the Osbourne tax hike, severely restricting their ability to borrow.

It is also possible that we are seeing the fallout from the fallow acreage initiative, corporate acquisitions and expiry of acreage awarded in the 1960s, which has led to a lower number of licences with pressure to drill.

I work in the industry and know first hand how many drilling contracts have ended up in the shredder.

Not good. Not good at all if you think Britain has a future filled with self sufficient energy.

So, where do you think energy prices are going for the UK?

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"It appears that something has gone badly wrong in the UK sector and there is a need to kick-start re-investment in the North Sea where significant resource remains untapped."

The key sentence.

I don't see why it is necessary to kick start investment. Companies will invest when the price and time is right.

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Here's the latest production chart for UK energy. The data set is noisy due to periodic maintenance downtime so I've used a moving average to smooth it, but the trend is pretty clear.

UKEnergyProduction0411.gif

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Here's the latest production chart for UK energy. The data set is noisy due to periodic maintenance downtime so I've used a moving average to smooth it, but the trend is pretty clear.

UKEnergyProduction0411.gif

Yeah. Scary stuff. More specific info here: https://www.og.decc.gov.uk/information/statistics.htm & https://www.og.decc.gov.uk/pprs/full_production.htm

People need to wake the F up about these matters; but if they don't, so what. Just figure out how to extort as much out of the ignorant as possible, eh?

Edited by cashinmattress

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Here's the latest production chart for UK energy. The data set is noisy due to periodic maintenance downtime so I've used a moving average to smooth it, but the trend is pretty clear.

UKEnergyProduction0411.gif

OK nice but where's the data for the imported energy, preferably broken down in the same way?

It's needed for the context, that graph isn't very meaningful otherwise.

Plus you should have a smudge along the zero line to represent wind energy. :rolleyes:

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I've always thought this is going to be a game-changer. Coincidence that there was the announcement of the new nuclear reactors not long ago? Screwed is the word.

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Consider the alternative though -- over here, some petroleum industry guy was bubbling over with enthusiasm at the prospect of drilling 1,000,000 gas wells over the next 60 years, now that the drilling moratorium has been lifted. (Don't know if that 1,000,000 total includes NY+PA or just NY.)

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Consider the alternative though -- over here, some petroleum industry guy was bubbling over with enthusiasm at the prospect of drilling 1,000,000 gas wells over the next 60 years, now that the drilling moratorium has been lifted. (Don't know if that 1,000,000 total includes NY+PA or just NY.)

And all based on fantasy estimates of the yields on these wells.

http://www.nytimes.com/2011/06/26/us/26gas.html?_r=2&partner=rss&emc=rss

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Here's the latest production chart for UK energy. The data set is noisy due to periodic maintenance downtime so I've used a moving average to smooth it, but the trend is pretty clear.

UKEnergyProduction0411.gif

That graph is anything but clear to me.

What do you mean by nuclear? Do you mean uranium? I didn't know the UK has uranium mines.

If you actually mean electricity produced by nuclear plants, how can you call that a primary fuel?

With regards to petroleum, gas and coal, is that extraction or consumption?

If it's extraction then you need to put in relation to consumption, otherwise it's meaningless.

Edited by awake_eagle

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Here's the latest production chart for UK energy. The data set is noisy due to periodic maintenance downtime so I've used a moving average to smooth it, but the trend is pretty clear.

UKEnergyProduction0411.gif

This graph explains why the UK has not run a monthly trade surplus since the late 1990s.

Thankyou for the chart.

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LONDON (Reuters) - Non-financial companies' profitability rose to its highest since the fourth quarter of 2008 in the first three months of 2011, official data showed on Wednesday.

The Office for National Statistics said that the net rate of return for private non-financial companies rose to 12.7 percent from 12.5 percent in the last three months of 2010.

This was driven by a rise in the profits of oil and gas companies operating on the UK Continental Shelf, whose profitability increased to 47.6 percent from 44.4 percent.

Profitability at manufacturing and services companies fell. Manufacturers' profitability almost halved to 6.1 percent, its lowest in a year, while that for service companies slipped to 14.9 percent from 15.2 percent.

With profit margins like this you would have thought investment would be flooding in.

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This graph explains why the UK has not run a monthly trade surplus since the late 1990s.

Thankyou for the chart.

Germany is not an energy exporter but still has a trade surplus, same for Japan.

If the trade surplus of the UK economy depended on energy exports then the UK was f*cked already before the late '90s.

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That graph is anything but clear to me.

What do you mean by nuclear? Do you mean uranium? I didn't know the UK has uranium mines.

If you actually mean electricity produced by nuclear plants, how can you call that a primary fuel?

The definitions are the DECC's, not mine, but in any case I think you know full well what the chart shows and I wish I had as much time as you to waste on making pedantic points.

With regards to petroleum, gas and coal, is that extraction or consumption?

See comment above.

If it's extraction then you need to put in relation to consumption, otherwise it's meaningless.

I don't have to do anything of the sort. It's a production chart, period. I didn't make any claims whatsoever about what the chart means in a wider context.

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Germany is not an energy exporter but still has a trade surplus, same for Japan.

If the trade surplus of the UK economy depended on energy exports then the UK was f*cked already before the late '90s.

UK would have been better off if north sea reserves had never existed , then the pound would have devalued so much that exports would be more competitive.

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  • 312 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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