Endeavour Energy, a newly founded American company, is investing resources in both sectors. GEO ExPro talked to Idar Kjørlaug, Exploration Manager, Norway.
Endeavour is exploring solely in the North Sea. Why is this?
The founders of Endeavour recognised that with the maturing of the oil and gas industry in the North Sea, many larger, integrated energy companies have restructured their portfolios away from the area. This shift has created operating opportunities for smaller players with the technical capabilities to profitably exploit the remaining reserves. We believe good exploration opportunities are present both in the proven mature exploration models as well as in new, less tested plays.
Idar, what are the benefits of exploring in Norway and likewise in the UK?
The Norwegian shelf is less mature than the UK shelf, particularly the Norwegian Sea and the Barents Sea. It therefore represents a unique opportunity for exploration in relatively mature areas with access to infrastructure, as well as in real frontier areas. It is still possible to acquire relatively large licenses covering an entire play. A number of initiatives from the Government, including fiscal incentives, also make it attractive to explore in Norway.
Looking at the UK shelf, there is still substantial remaining potential. The activity level is high, exemplified by the drilling of 29 exploration and 39 appraisal wells last year resulting in a 31% success rate. The farmout market is buoyant and the DTI awarded 150 licenses in the 24th license round. All this is a result of a consistent policy of promoting activity in the UK based on, among other measures, an active fallow block and fallow discovery programme, the Promote license initiative, regular license rounds and an easy access to data policy.
There are a number of newcomers in both sectors, thanks to various government initiatives. Some of these companies will probably not succeed. Why will Endeavour be a winner in the long run?
In the three years since the company was founded, Endeavour has already established a broad portfolio of licenses. This includes production of more than 9,000 boe per day (net to the company) from the UK and Norway, and an exploration portfolio of 44 licenses. We expect to operate or to be partners in at least six exploration wells this year. In addition, we have an experienced and skilled staff of technical people who are able to take advantage of our extensive data base. This portfolio of production and exploration opportunities, human resources and data and a strong focus on technical evaluations will enable us to grow organically and put us in a position to take advantage of any business development opportunities that may arise. Our presence in both countries make it possible for us to take advantage of the high activity level and quicker turnaround in the UK, while being exposed to the potential in Norway and allows us to leverage the transfer of technical knowledge between the two countries.
How do you look upon recent advances in technology? Which do you consider the most promising for your company?
We believe that detailed analysis of seismic data (AVO etc.), combined with OBS (Ocean Bottom Seismic) when appropriate, is and will continue to be a valuable tool. EM (electromagnetic methods) is promising and only in its infancy. These methods, combined with the use of modern interpretation tools for a careful analysis of state of the art geophysical and geological data, all incorporated into a comprehensive analysis of the petroleum system, will make it possible to develop new exploration plays as well as to further exploit known ones.
Do you see the possibility of finding another giant (i.e. a field with reserves of more than 500 MMboe) in the North Sea?
There are still possibilities in the North Sea. The “Kogge” prospect drilled last year in the almost unexplored “northern Permian Basin” could have resulted in such a discovery. New long offset data also reveals other older basins. There is also potential in deep targets both in the Central Graben as well as in the Northern North Sea. In addition, there are Cretaceous carbonates in the Viking Graben area, as well as potential Lower Cretaceous sand play fairways fringing the Central and Viking Grabens, both plays that may give some interesting drilling opportunities in the years to come. Endeavour is positioning itself to pursue these opportunities as well as being active in the established plays.
