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Ithaca Energy has entered a four-week exclusivity agreement with Eni to finalise a deal to merge the Italian operator’s UK upstream assets into Ithaca to create the second biggest independent oil and gas producer on the UKCS. The UK-listed operator is aiming to conclude a deal with Eni that would boost pro-forma production of the enlarged company to more than 100,000 b/d of oil equivalent. Under the terms of the proposed deal, Eni will contribute most of its UK business, including the assets recently acquired via its purchase of Neptune Energy, in return for new shares that will give it an estimated 38-39% interest in the enlarged Ithaca after completion. The Eni UK business that would be merged into Ithaca includes interests across four main hubs, comprising TotalEnergies-operated Elgin-Franklin, the Harbour Energy-operated J-Area, BP-operated Seagull and Eni-operated Cygnus. Eni’s carbon capture, utilisation and storage and Irish Sea businesses are not part of the proposed deal. The assets had 2023 pro-forma production of 40,000-45,000 boed and proved and probable reserves of around 100 million boe as of the end of last year.
North Sea industry representatives are warning that the UK could miss out on the lion’s share of the benefits of a domestic offshore energy market that could grow to £450 billion ($568 billion) by 2040 without stable policy for the sector and a “globally competitive tax regime”. Offshore Energies UK (OEUK), in its recently published
2024 Business and Supply Chain Outlook, said the UK oil and gas sector, despite its maturity, has the potential to create £145 billion worth of business for the UK supply chain by the end of the next decade. It added that offshore wind farms around the nation could provide £260 billion worth of work, new hydrogen projects £25 billion and the carbon capture and storage sector another £34 billion. OEUK argues that in addition to this domestic market, the right conditions could allow the UK offshore energy sector to benefit from a global export market worth more than £1 trillion over the next 15 years. “However, success depends on harnessing the UK’s oil and gas heritage and attracting the private investment needed to maintain the existing energy industry and its highly skilled workforce,” it argues.
Equinor has found oil and gas in Heisenberg appraisal wells 35/10-11S and 35/10-11A, in PL827S and PL827SB, with an additional discovery of oil in the Hummer prospect. According to the Norwegian Offshore Directorate, preliminary estimated reserves in Heisenberg are 3.8-8.9 MMcm of oil equivalent, corresponding to 24-56 million boe. This compares with a pre-drill estimate of 4.1-9 MMcmoe. Preliminary estimates for Hummer are 0.1-0.6 MMcmoe. Heisenberg was discovered last year in 35/10-9 (NSR 721/2). Heisenberg well 35/10-11S encountered a sandstone reservoir about 10 metres thick with good reservoir quality in a primary Eocene Hordaland formation. In the Hummer prospect, the well found a 3-metre thick oil column in a 23-metre-thick interval with poor to moderate reservoir quality in a secondary Upper Palaeocene to Lower Eocene Balder section. Sidetrack 35/10-11A found a 12-metre thick oil and gas column with moderate to good reservoir quality in a Hordaland formation. . The wells, which have been permanently plugged and abandoned, were drilled with the Deepsea Stavanger.
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