Stratic Energy

Printable company profile from OilVoice

Address
130 Jermyn Street
London
SW1Y 4UR
United Kingdom
Tel +44 (0)207 016 6420
Web http://www.straticenergy.com
Email stratic@straticenergy.com

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Capex

Future Plans

In the UK sector of the North Sea, Stratic’s field developments are making excellent progress. Late in 2007, the Field Development Programme (“FDP”) for the West Don oil field (Stratic 17.25%) was submitted for UK Government approval, a drilling rig contract for the development drilling was signed and the Northern Producer floating production facility secured under a flexible lease arrangement. Government approval of the West Don FDP is expected in the second quarter of 2008. Development drilling on West Don and its sister field, Don South West, will commence once the John Shaw semi-submersible drilling rig is released from its current contract (currently anticipated in late July 2008) and is expected to continue through to March 2009, with first oil expected shortly thereafter.

At the Crawford oil field (Stratic 19.0%) the partners have moved the project into the development planning phase, with a target of submitting a FDP by the end of 2008, following the successful appraisal well drilled late last year. Work throughout 2008 will consist of reservoir engineering studies, facilities engineering studies, offtake identification and negotiation, development optimisation and preparation of the FDP and environmental impact assessment.

In the Dutch sector of the North Sea, the Horizon West (block P8a; Stratic 48% of field unit) project operator, Chevron, is finalising the development plan, budget and arrangements with host infrastructure owners. Following the front-end engineering and design (“FEED”) study conducted by the operator, the budget has increased from earlier estimates reflecting the requirement for a heavyweight jack-up drilling unit and more extensive host platform modifications. The partnership is reviewing the impact of these changes prior to investment approval, which is targeted for mid 2008. Drilling activity will depend on the availability of a suitable jack-up rig, but is expected to commence in the second half of 2008.

In Italy, the operator for the Longanesi gas field development, ENI, has mobilised the project team and expects to submit the field development plan to the authorities by mid 2008. The approval process covering this plan and the related environmental impact assessment involving a number of different licensing authorities will then follow, with construction and drilling work on site expected to commence in the second half of 2009.

In Turkey, gas production from the South Akcakoca Sub-Basin (“SASB”) Phase I development resumed from the Akkaya and East Ayazli fields on February 11, 2008 and commenced from the Ayazli field on March 14, 2008. Production levels are currently around 27 mmscf per day (gross, Stratic share: 3.3 mmscfd or 550 boepd). Further remedial work is under evaluation to optimise production over the balance of the year. Phase II of the development of the deeper water SASB discoveries made in late 2006 and early 2007 is nearing completion of the project definition phase. Stratic currently has a more conservative estimate of recoverable volumes for this phase of development than the operator, TPAO, requiring a measured approach to the investment decision.

Exploration and appraisal:
Stratic’s exploration and appraisal drilling program for the next 18 months is now firming-up and is expected to include the drilling of around eight wells over that period. These are expected to include appraisal wells on the Breagh, Cairngorm and Bowmore discoveries in the UK North Sea, and an onshore exploration well on Block 17, Syria.

At Breagh (Stratic 10%), the Company plans to drill at least two and possibly three wells in 2008 following the successful West Breagh appraisal well 42/13-3 drilled in late 2007. We recently announced that the Ensco 70 drilling rig has been secured for the 2008 Breagh drilling program, which is planned to include a further appraisal/development well on West Breagh designed to test the productivity of a high-angle section in this reservoir in order to optimise the development plan. Conceptual development planning work has also commenced. A second well will be drilled to test a large mapped extension of the structure to the east, which is potentially larger than the existing West Breagh discovery.

At Cairngorm (blocks 16/2b and 16/3d; Stratic 50% and operator), Stratic has now completed the subsurface study of the fractured granite reservoir encountered in the original 16/3a-11 discovery well and has concluded that the recorded flow rate of 2,900 bopd was impacted by the premature cementing of the well prior to testing. Fracture studies based on detailed picks from the 3D seismic data, integrated with regional stress information, have led to the development of a dynamic reservoir model that suggests that the Cairngorm granite can be commercially developed. Interpretation of the 3D seismic acquired last year has also led to a maturation of several prospects and leads in the shallower Tertiary sandstones. Stratic is planning a well to target two of the Tertiary prospects and then intersect the Cairngorm granite reservoir adjacent to the original well, with the intention of intersecting the same fracture system. The well will be designed to be used as the first of two production wells. A site survey was completed in February 2008 and a drilling unit for a second half 2008 spud is currently being sourced. If the well is successful it is anticipated that Cairngorm could demonstrate high productivity, and therefore has potential for attractive early cash flow.

At Bowmore (block 15/24a; Stratic 30%), the operator, Nippon Oil, is undertaking well planning activities with a view to spudding an appraisal well on this gas condensate discovery around the end of 2008 or early 2009. The well will be designed to test the interpreted extension and thickening of reservoir sand down-dip. Stratic expects that it will farm out part of its equity in Bowmore prior to drilling.

At Block 17, Syria (Stratic 35% and operator), new seismic data acquired in 2007 has now been interpreted with very encouraging results. The partnership is currently reviewing the prospect inventory with a view to selecting a target to drill in the fourth quarter of 2008. There are encouraging signs that it may be possible to advance the development of any new discoveries independently of the nearby discoveries in the Palmyra Gas Basin.

Looking further ahead, Stratic is planning for at least two operated wells in the North Sea in 2009: an exploration well on Block 210/20a in the UK sector and a likely appraisal well on one of the existing discoveries on the F Quad blocks in the Dutch sector.

Reserves

Net proved and probable reserves increased from 4.8 mmboe at December 31, 2006 to 19.1 mmboe at December 31, 2007.

The increase in net proved and probable reserves reflects: the reserves acquired as part of the Grove Energy acquisition, the recognition of proved and probable reserves attributable to the Crawford field in the UKCS following the successful appraisal well drilled on that field last year, net of a downward adjustment in proved and probable reserves of 1.0 mmboe attributable to the Company’s assets in Turkey. This adjustment principally reflects poorer-than-expected production performance from the East Ayazli field and the decision to re-categorise the deeper water Akcakoca area volumes which could be developed under Phase II as contingent resources rather than reserves.

Who's Who

Kevin P. Watts, C.A.
President, Chief Executive Officer and Director
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Tom Mackay, B.Sc.
General Manager
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Mark Bilsland
Executive Director and Chief Operating Officer
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Andrew Childs
Non-Executive Director
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Colin Orr-Ewing
Non-Executive Director
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Ennio Sganzerla
Non-Executive Director
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John Weatherall
Non-Executive Director
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David Curry
Non-executive Director
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John
Chief Financial Officer
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Offices

Canada
Head Office
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Canada
Head Office
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United Kingdom
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United Kingdom
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