In 2019, when Spirit Energy expressed an interest to develop the Pegasus West discovery as a tie-back to the Neptune-operated nearby Cygnus field, Neptune blocked the concept as it claimed that the platform did not have enough capacity. This caused some tension between the two companies, especially because Spirit holds a 61.25% majority share in the Cygnus development as a non-operating partner.
What has caused the change of plans, now that the companies have decided to develop the Pegasus West discovery as a tie-back to Cygnus?
One of the possible scenarios is the drilling of exploration well 44/12b-7 to the northeast of the Cygnus field in 2018. According to Neptune, the well was drilled into a previously untested fault block in the Greater Cygnus area. The well came in dry. Although this happened before the reported dispute between Spirit and Neptune in 2019, the subsequent analysis of the exploration results and the potential of the area to the northeast of Cygnus may have ranked the Pegasus West higher on Neptune’s list of potential tie-backs to Cygnus.
At the same time, Spirit may have been more willing to further negotiate a deal to develop Pegasus West in the light of the Andromeda North well drilled in 2019. Described as a low-risk prospect by Spirit’s partner HALO at the time, the 43/12a-3 well came in at the lower end of expectations. Pre-drill estimates were 40 Bcf or 7.1 MMboe.
The results of these two exploration campaigns may have brought the two companies to a situation where a deal could more easily be reached in the interest of getting Pegasus West gas to market and extend the life of Cygnus as a regional gas hub. Spirit will keep a 61.25% non-operating stake in Pegasus West, similar to Cygnus.
Andromeda North
As HALO reported in a press release, the 43/12a-3 Andromeda North well proved that the gas column found in Upper Carboniferous sandstones was not in pressure communication with Pegasus West, as the pre-drill expectation was. Instead, it was found at a shallower level, which explains the disappointing outcome of the well. A cross-section published by Bernard Besly in 2018 illustrates this nicely (see above). We indicated both the pre-drill GWC as well as an interpreted depth of the GWC found by the well (for illustration only).
Pegasus West
The Pegasus West discovery, drilled by well 43/13b-7 in 2014, proved gas in Upper Carboniferous fluvial Westphalian A reservoirs. As the cross-section shows, the ultimate seal to the discovery is the Permian Silverpit Fm trough a truncation trap, but intra0Carboniferous sealing must also play a role in order to define the closure. There may be upside on Pegasus West through drilling slightly deeper sandstone intervals that are likely to be within the gas leg.
In a press release, HALO expected Pegasus West to contain up to 129 Bcf or 23 MMboe, but Energy Voice reported a volume of 83 Bcf and 14.5 MMboe yesterday.
HENK KOMBRINK
