We are: Ready Technically
The geological and geophysical studies are
nearing completion and from a G&G standpoint we are ready to
As we move into 2012, our focus has shifted to completing the
work required to finalise well locations and more importantly to
completing the studies necessary to plan and to safely execute the
drilling of our initial obligation well.
The acquisition of 3D confirms and better defines the
prospective structures mapped on the 2D. Significantly the
data also provides additional encouragement regarding source
potential and fetch area.
What do you mean by 'we are ready technically' to drill?
Our licences were awarded in 2007, since that time we have
worked diligently to collect all available historic geological and
geophysical data and where possible re-examine using modern
technologies and interpretative techniques. At today's prices the
data would have cost millions of dollars to acquire. This
information, especially that from the previously drilled wells,
afforded us sufficient excitement and encouragement to go ahead and
invest in the acquisition of new information, particularly seismic
data to better understand the detail of the petroleum systems and
ultimate scale potential of our licences.
Subsequently, all of the new data we have collected and
interpreted confirms The Bahamas has 'World Class' petroleum
potential, with multiple, very large traps identified. Well data
confirms the reservoir potential; seismic and well information
provide encouragement for sealing intervals; and, the regional
geology provides evidence of the likelihood of rich source rocks in
the Upper Jurassic. The geological and geophysical (G&G)
studies are nearing completion and from a G&G standpoint we are
ready to drill. With the acquisition of the recent 3D seismic
survey we also have all the data necessary to be able to design a
well with the best chance of success and optimised from a safety
What work remains to be done?
Much work needs to be done before we spud our first well. The
Government is working to put regulations in place to oversee oil
and gas activity. We expect these regulations to be in place
prior to our drilling. As we move forward in our plans we are
aligning ourselves, with the best practices of Norway, the UK and
the US. We have completed and submitted an Environmental Impact
Assessment (EIA) to the Authorities.
We have completed extensive oil spill modelling to understand
where we need to be ready to intercede in the unlikely event of an
incident. We have completed our worst case discharge calculation
and a drilling hazard study of our acquired multibeam data.
We have initiated our oil spill response plan and our
Environmental Management Plan (EMP), we have been accepted as a
member of Clean Caribbean Americas (www.cleancaribbean.org),
an association that can provide additional 'clean-up' equipment
should it be necessary and plan to ensure close co-operation with
the Cuban authorities in the near future to evaluate how emergency
response capabilities can best be integrated. Much of our
focus has shifted to well planning and we contracted with ADTI to
start front end engineering design and well planning. This will
include a careful review of the previously drilled wells and
careful integration of our 3D data into our drilling plan.
Has the 3D materially changed the conclusions reached by the Ryder Scott 'Competent Persons Report'?
It is our opinion that the 3D has enhanced the original 2D
generated conclusions. However, there are some changes to our
interpretation and perception of risk. Ryder Scott estimated the
risked potential to be greater than 1 billion barrels from the
Aptian through Top Cretaceous section, with an average risk of
about 1 in 4 from three gross reservoir intervals on each of four
structures. Three of the structures were each assessed to have
unrisked potential in excess of 1 billion barrels of oil.
Ryder Scott did not assess the potential in the younger Tertiary
section nor the pre-Aptian and Jurassic section. The 3D confirms
the overall integrity and size of the mapped structures. On the 3D
the mapped structures at Albian and Aptian levels beneath the
thrust trend closest to Cuba (designated 'Thrust A, Fold A' in the
CPR - see page 15) appear to be velocity artefacts of the
Cretaceous carbonate platform. If confirmed by completion of
the 3D interpretation this would likely impact potential estimated
by Ryder Scott at this location, however, we believe this is more
than compensated for by modifications to the overall risking as
well as the pre-Aptian section in the next thrusted structure
(designated 'Fold B') as well as the broad Jurassic closure beneath
the thrust. More importantly the 3D now shows the section below
'Trend A' to be dipping uniformly to the south west and providing
an uninterrupted oil migration pathway from the Cuban foredeep
Your licences have a variety of play types, what is your current thinking on the first well?
There are a variety of play types on our acreage; reef margin
plays similar to Golden Lane in Mexico, fore reef debris and
breccia plays similar to the Canterell complex, very large foreland
basin structures comparable in geology and size to many fields in
the Middle East and possible deeper rift basin structures.
We believe the best location for our initial well will be to
test 'Fold B' into the upper Jurassic. The CPR indicates this
feature has the potential for over 2 billion barrels of oil in the
Cretaceous section alone. We will plan our initial well to a depth
of approximately 22,500 feet which will take it through the
thrusted anticline across the thrust fault into a broad structure
in the Upper Jurassic. We believe this well will test the largest
potential volumes, multiple reservoir sections and will provide
definitive information on the anticipated Jurassic source.
Based on previous work we anticipate the well will take about 120
days and will likely be drilled with a semisubmersible rig in water
depth of about 1500 feet.
It's pretty far down the road but have you thought about development options?
There is still significant geologic risk - the chance that we
will drill a dry hole, but if we are successful the final
development plan would depend on the type of hydrocarbon found (oil
or gas), oil gravity and wax content, and ultimately the absolute
volume of hydrocarbons found. At present a phased development using
subsea well heads and an FPSO would seem to be the most efficient
way of ensuring early production, minimum environmental impact and
providing both direct and indirect employment.