Bow Valley Energy Ltd. has announce that the U.K. and Norwegian governments have approved the development of the Blane and Enoch fields which straddle the U.K./Norway median boundary in the North Sea. These approvals will allow the joint venture partners in the fields to proceed with development, with first oil expected by late 2006. Combined, the fields are expected to add over 26,000 (3,200 net) b/d of high netback oil production, net to Bow Valley.
Blane (Bow Valley 12.5%)
The Blane field was discovered in 1989 by well N1/2-1 which encountered an oil accumulation in the Palaeocene Upper Forties Sandstone. The structure was successfully appraised in the same year by a well in the U.K. sector, 30/3a-1.
The field will be developed by three subsea wells (two producers and one water injector) to be tied-back to the BP operated Ula platform, located 34 kilometers northeast of Blane. The anticipated capital cost to develop the Blane field is approximately pnds stlg 165 million (pnds stlg 20.6 million net) or approximately C$361 million (C$45.1 million net). Production will begin in late 2006 at a rate of over 14,000 (1,750 net) barrels per day. Oil will be pipelined through existing infrastructure and sold at Teeside, England, whereas associated natural gas will by sold offshore at the Ula platform.
Enoch (Bow Valley 12.0%)
The Enoch field was discovered in 1985 by UKCS well 16/13a-3 which encountered oil in the Eocene Flugga Sandstone. The field was later appraised by four more wells, two of which were drilled in the Norwegian sector.
The field will initially be developed by a single subsea production well at an anticipated cost of approximately pnds stlg 75 million (pnds stlg 9.0 million net) or approximately C$164 million (C$19.7 million net). There is
provision to drill a water injection well at a future date if production performance warrants it. The production well will be tied-back to the Marathon operated Brae A platform, located 15 kilometers northwest of Enoch. Production will start in late 2006 at a rate of over 12,000 (1,440 net) barrels per day. Enoch oil will be exported from Brae A through the Forties Pipeline System and sold at Kinneil, whereas associated natural gas will be sold offshore at Brae A.
Commenting on the development approval of both the Blane and Enoch fields, Robert Moffat, President and Chief Executive of Bow Valley stated: "We are extremely excited by the fact that Bow Valley's portfolio of offshore assets in the North Sea are beginning to be developed. These development projects represent many years of planning and co-operation between the joint venture partners and the UK and Norwegian governments. The development projects will more than double our current corporate production and cash flow within the next twelve to eighteen months. They represent the next step in our strategic plan to become an international intermediate producer. Bow Valley owns an equity interest in three other field development projects in the North Sea and we expect to be in a position to make a similar announcement on the Chestnut field by early 2006. The required capital contribution for these projects will be provided from Bow Valley's current production revenue and a recently announced US$50 million credit facility with the Bank of Scotland."