TIDMBCE
RNS Number : 2260T
Beacon Energy PLC
13 November 2023
13 November 2023
Beacon Energy plc
("Beacon Energy" or the "Company")
Increase in Company's assessment of Erfelden Best Estimate
Reserves to 7.2 mmbbls
Operational Update
Beacon Energy (AIM:BCE), the full-cycle oil and gas company with
a portfolio of onshore German assets through its wholly-owned
subsidiary, Rhein Petroleum GmbH ("Rhein Petroleum"), announces an
increase in the Company's assessment of reserves in the Erfelden
field incorporating the results of the recently drilled
Schwarzbach-2(2.) ("SCHB-2(2.)") well.
SUMMARY
-- As previously announced, the SCHB-2(2.) well encountered a
34-metre gross interval containing 28 metres of oil-bearing net
reservoirs in the Pechelbronner-Schichten ("PBS") sandstones within
the Stockstadt Mitte segment of the Erfelden field.
-- These oil-bearing reservoirs were encountered approximately
25 metres higher and 10 metres thicker than prognosis, with
excellent porosities and no water-bearing sands in the Low Case 42m
hydrocarbon column.
-- In addition, following a revised well-to-seismic tie
incorporating the PBS, which was encountered shallower than
predicted in the SCHB-2(2.) well, re-mapping of the 3D seismic data
indicates that the Stockstadt Mitte-1 well ("STKM-1") drilled by
Exxon in 1986 penetrated the Meletta and Upper PBS reservoirs in
the adjacent Schwarzbach South segment of the field. The Company's
view is that the contingent resources associated with this segment
should be re-categorised as reserves that are justified for
development.
-- The re-mapping also shows that there is no clear indication
of a material fault offset between the Stockstadt Mitte segment and
the adjacent Schwarzbach South segment. Beacon believes that there
is a high likelihood that these segments are connected and share a
common oil-water contact at 1616mTVDSS, which is supported by the
updated mapping, the gas ratios data from the SCHB-2(2.) well, and
the pressure data in the Meletta reservoir in the STKM-1 well.
-- The Company's updated assessment of potential reserves for
these two now proven and likely connected segments of the central
part of the Erfelden field are:
Low Case : 4.72 MMbbls
Best Estimate Case: 7.24 MMbbls
High Case : 10.20 MMbbls
These new figures are the result of the thicker and higher
quality reservoirs being encountered and the inclusion of reserves
in Schwarzbach South.
-- The SCHB-2(2.) well has been tied-back to the wholly-owned
Schwarzbach Production facility to continue well clean-up
operations.
-- A rod pump is currently being installed. Commercial
production is expected in the second half of November aided by the
rod pump which has the capacity deliver up to a maximum rate of 250
barrels of oil per day ("bopd").
-- It is expected that once the well is fully cleaned up and
production has been sustained for a period, the rod pump will be
replaced with an E lectrical Submersible Pump ("ESP") which has
higher capacity. As previously announced, based on the excellent
reservoir properties and the light oil recovered from the
SCHB-2(2.) well, standard oil-industry analysis indicates that an
initial production rate in excess of 900bopd could be achieved with
the installation of an ESP.
The original Field Development Plan ("FDP") was to develop the
Stockstadt Mitte segment with two producer wells and a water
injector. The Company is currently undertaking a full-field review
to determine how best to develop the central part of the Erfelden
field to optimise the value of the additional reserves demonstrated
by the SCHB-2(2.) well.
A third-party independent Competent Person's Report ("CPR") on
reserves will be commissioned subject to the outcome of the seismic
reprocessing trials, a decision on a seismic reprocessing campaign
and the modifications made to the FDP.
FORWARD PLAN
-- Commercial production from the rod pump currently being
installed on the SCHB-2(2.) well is expected in the second half of
November during which the reservoir is expected to continue to
clean-up.
-- The expectation is that the rod pump will be replaced with an
ESP in the middle of the first quarter of 2024 which has the
capacity to optimise initial production from the well. The actual
production will determine if any future interventions are required
in this well.
-- Subject to the results of the full-field review, the current
FDP is likely to be superseded by a development programme with more
wells over the central part of the Erfelden field to optimise the
value of the additional reserves demonstrated by the SCHB-2(2.)
well and the de-risked Schwarzbach South segment .
-- An independent third-party CPR will be commissioned based on
any seismic reprocessing and the update to the FDP.
The Company expects to provide a further update on the reservoir
clean-up operation in the SCHB-2(2.) well after establishing a
stabilised and sustained flowrate from the rod pump.
Beacon Energy Chief Executive Officer, Larry Bottomley commented
:
"This internal assessment following the drilling of SCHB-2(2.)
confirms the material impact the well has had on our reserve base
in both the Stockstadt Mitte segment of the Erfelden field and the
de-risked adjacent Schwarzbach South segment. As a result of the
SCHB-2(2.) well, the Company believes that the Best Estimate
reserves on the Erfelden field have increased from 3.8 mmbbls
(pre-drill) to 7.2 mmbbls. The development of both segments that
make up the central part of the Erfelden field will now be
incorporated into a revised field development plan to realise the
value from the material upgrade in the Company's assessment of
reserves.
"We remain fully focused on bringing SCHB-2(2.) into optimal
production as quickly as possible. We are working hard across all
aspects of the subsurface evaluation and we are undertaking a
comprehensive review of the drilling and completion operations to
incorporate these learnings into an updated field development plan
to deliver this additional value.
"We look forward to providing an update on the clean-up and
production from the well in due course."
Enquiries:
Beacon Energy plc
L arry Bottomley (CEO) / Stewart MacDonald (CFO) +44 (0)20 7466 5000
Strand Hanson Limited (Financial and Nominated Adviser)
Rory Murphy / James Bellman +44 (0)20 7409 3494
Buchanan (Public Relations)
Ben Romney / Barry Archer / George Pope +44 (0)20 7466 5000
Tennyson Securities Limited (Broker)
Peter Krens / Ed Haig-Thomas +44 (0)20 7186 9030
For further information, please visit www.beaconenergyplc.com and @BeaconEnergyPlc on Twitter
To register for Beacon Energy's email alerts, please complete
the following form:
https://www.beaconenergyplc.com/media-centre/news/#alerts
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018.
Technical Standard
The technical information in this announcement has been prepared
under the PRMS - Petroleum Resources Management System created by
the Society of Petroleum Engineers, a global standard of petroleum
reserve and resource classification together with guidelines and
accepted methodologies for the definition and estimation of
petroleum resources and their monetary valuation.
Qualified Person's Statement
Mr Larry Bottomley, CEO at Beacon Energy, has reviewed and
approved the technical information contained within this
announcement, in his capacity as a qualified person, as required
under the AIM rules. Mr Bottomley has over 40 years' experience in
the oil and gas industry, prior to which he studied Geology (BSc.)
at Imperial College, University of London, followed by Stratigraphy
(MSc.) at Birkbeck College, University of London.
About the Erfelden Field
The Erfelden oilfield is the most northern oil field in the
Upper Rhine Graben and is comprised of four juxtaposed structural
segments: the partially depleted western part of the Erfelden field
(the Kuehkopf segment), the producing northern part of the Erfelden
field (the Schwarzbach Main segment), and the central part of the
Erfelden field comprised of the Stockstadt Mitte segment, proven by
the SCHB-2(2.) well, and the Schwarzbach South segment proven by
the STKM-1 well.
The westerly Kuehkopf segment was discovered by Exxon and
produced oil between 1956 and 1985, who also operated the adjacent
Stockstadt field. Both accumulations were discovered, appraised and
developed from the subsurface description from legacy 2D seismic
data.
Rhein Petroleum (a wholly-owned subsidiary of Beacon Energy)
subsequently secured the licence (Operator, 100%) and acquired an
extensive 3D seismic survey which led to the discovery of the
Schwarzbach Main segment in 2015 when the Schwarzbach-1 well
(SCHB-1) discovered oil in the PBS sandstones in a North-South
trending structural high at the northern end of the Erfelden Field.
This segment is still producing light oil (37-38(o) API) from the
SCHB-1a well through the Schwarzbach Production facility.
Beacon believes that the SCHB-2(2.) well has now proved the
commercial potential of the Stockstadt Mitte segment. Following
this well and the update well-to-seismic tie, re-mapping of the 3D
seismic data indicates that the STKM-1 well drilled by Exxon in
1986 has proven oil in the PBS in the adjacent Schwarzbach South
segment which de-risks this segment. The re-mapping supports the
view that these two segments are connected and comprise the central
part of the Erfelden field, and the recently completed Company
review now assigns a Best Estimate Case reserve of 4.72MMbbls and a
High Case reserve of 10.20MMbbls and the intention is to undertake
an independent Competent Person's Report based on these well
results and the outcome from any seismic reprocessing.
The original FDP was to develop the Stockstadt Mitte segment of
the field with two producer wells and a water injector. The Company
is currently undertaking a full-field review to determine how best
to develop the central part of the Erfelden field. Subject to the
results of this review, the current FDP is likely to be superseded
by a development programme with more wells over the central part of
the Erfelden field to optimise the value of the additional reserves
demonstrated by the SCHB-2(2.) well and the de-risked Schwarzbach
South segment.
The drill pad for the initial three wells envisaged in the
original FDP was prepared immediately adjacent to the Schwarzbach
Production facility, which is wholly-owned and operated by the
Company, and conductor pipes for each of these wells were set to a
depth of 85m below ground level. A flowline from the drilling pad
to the Schwarzbach Production facility will allow tie-back and
hook-up as these wells are completed and put into production.
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END
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