EnQuest shaves off $100 million of Kraken costs

UK-based oil and gas company EnQuest has further cut costs on its Kraken development in the UK sector of the North Sea by $100 million. 

In its half year results on Thursday, EnQuest confirmed it had reduced Kraken’s full cycle gross project capex by a further c.$100 million, down to $2.4 billion, 25% down on the original sanctioned cost of $3.2 billion.

The capex savings is expected to be achieved as a result of the drilling of DC3 being completed 3 to 4 months earlier than planned and lower market rates for the remaining subsea campaign.

The company also said that the first cargo load of oil is expected to be lifted from the Kraken FPSO in the next few days.

First oil from Kraken was delivered on June 23, 2017. EnQuest expects plateau production at Kraken of approximately 50,000 Bopd gross in the first half of 2018.

The proven individual stabilized production rates from the six wells tested so far aggregate to around 30,000 bopd, representing over 60% of the c,50,000 bopd gross plateau production.

EnQuest CEO, Amjad Bseisu, said: “Kraken remains on course to achieve plateau production of approximately 50,000 Boepd gross in H1 2018, driving a material increase in EnQuest’s production in 2018 and beyond. EnQuest expects to deliver the targeted reductions in capital expenditure post Kraken start up and to complete the Magnus/SVT acquisition before the year end.”

According to the company, to date, the four wells from drill centre 1 (DC1) and two wells out of the three wells from drill centre two (DC2), have produced at initial gross rates above expectations and with stabilized flow rates which confirm the Field Development Plan. The sum of DC1 maximum individually tested well rates have been approximately 24,000 Bopd, with stabilized combined well rates at approximately 15,000 Bopd.

The company further stated that one DC2 well has been tested at a rate above 10,000 Bopd, demonstrating excellent reservoir properties and completion efficiency. The proven individual stabilized production rates from the six wells tested so far aggregate to around 30,000 bopd, representing c.60% of the c,50,000,bopd gross plateau production. Injection wells have also surpassed expectations. The hydraulic submersible pumps, subsea production system and turret have all performed as expected.

Commissioning of the FPSO vessel topsides equipment continues and, despite good well deliverability, has been constraining production so far. Whilst in 3Q 2017, volumes are behind forecast as equipment is commissioned, EnQuest expects operational uptime to improve accordingly and to deliver plateau production of approximately 50,000 Bopd gross in 1H 2018. Whilst production is constrained, charter rates are reduced in accordance with production levels.

DC3 wells are now due to complete in 4Q 2017, ahead of schedule, further facilitating the achievement of plateau performance in 1H 2018.

Offshore Energy Today Staff

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