UK North Sea-focused oil company Serica Energy said Monday that its North Eigg well in the North Sea had encountered hydrocarbons but that "commercial quantities have not yet been established," with objective sands thinner than expected.
Earlier this year, Serica labeled the well as "high-impact and potentially transformational."
In a statement on Monday, Serica said: "The North Eigg exploration well 3/24c-6B has been drilled to a total depth of 16,728 feet in the Jurassic Heather formation and initial analysis indicates that, whilst the well has encountered hydrocarbons, commercial quantities have not yet been established.
"At the well location, the objective sands were thinner than had been prognosed but a total of 16 feet of hydrocarbon-bearing sands were encountered, and these have confirmed the presence of hydrocarbons at a deeper depth than in the adjacent producing Rhum field,"
Serica said that a full suite of wireline logging data had been acquired and "our analysis is ongoing."
Future sidetrack
"We aim to determine if a future sidetrack location can be designed to better evaluate the volumes of hydrocarbon in this new discovery. It is our intention that the well will be suspended pending the results of this further work prior to future potential re-entry and sidetrack," Serica said.
Final well costs will not be known until after the rig is off hire, but it is likely that the net after tax cost of the well to Serica will be around £13 million. the company said.
Mitch Flegg, Chief Executive of Serica Energy, said:"Although the North Eigg exploration well has not delivered the result we had hoped for, it has demonstrated the presence of hydrocarbons and provided a huge amount of high-quality data. In particular, the presence of hydrocarbons at deeper than expected depths will lead to a re-evaluation of both North Eigg and South Eigg."