Borders & Southern gives positive update on Falklands´ fields

28th Jan 2013 08:44

Borders & Southern, a London based independent oil and gas exploration company, has cheered investors after revealing that tests on the Darwin structure in the South Falkland Basin have indicated that the potential liquid recovery could be greater than the initial prediction of 130m to 250m barrels.The firm said that if there is what it calls strong "aquifer support", the mid case could be as high as 210m barrels, compared to 190m barrels without. The study also demonstrated that more liquid could be recovered by gas recycling than by gas depletion.Net pay in the discovery well was previously determined as 67.8m, with porosity up to 30%, averaging 22%.A feasibility study conducted in the final quarter of 2012 revealed that Darwin East and Darwin West are technically viable as stand alone developments, phased developments or combined in parallel development. In addition, it showed there is sufficient confidence in current proven technology to develop the discovery.Facilities capital expenditure estimates for a Darwin East stand-alone development, including a 40% contingency, are $2.73bn if the floating production, storage and offloading (FPSO) unit is purchased or $1.585bn if the FPSO is leased. Capital expenditure estimates for a combined Darwin East and West development, again with 40% contingency, are $3.77bn (FPSO purchased) and $2.435bn. Economic modelling, undertaken by an independent consultant, has shown that a 200m barrel development project would be commercial at an oil price as low as $65/barrel. It has also shown that a 100m barrel development project could be commercial, but requires an oil price of at least $85/barrel. "The impact of all this new geochemical information is that there is likely to be a range of source rock types, quality and maturity levels in Borders & Southern's acreage and we might expect oil, gas and condensate in future discoveries," the company said. "With a focus on Early Cretaceous plays, two major projects will shortly be initiated: reprocessing of the entire 2008 3D seismic survey and the acquisition of approximately 1100 sq.km. of new 3D seismic. Acquisition is anticipated to commence in mid February. The two surveys will be merged to assist with the interpretation of the key play fairways and the maturation of the prospect portfolio. "Borders & Southern is currently inviting interested companies to a data room with the aim of gaining a partner prior to the next drilling campaign. An update will be provided later in the year."Chief Executive Howard Obee added: "I am delighted with the company's progress to date and extremely grateful to all those that have contributed to our success. We have a portfolio containing a very attractive discovery along with an exploration prospect inventory of quality and depth. The company is now moving into an exciting new phase, as we look to appraise the discovery and add to the discovered resources through further exploration."The share price leapt 13.54% to 27.25p by 09:14.NR