Hague and London Oil (HALO), an energy company with a diverse portfolio of production, development, appraisal and exploration assets primarily focused in the Southern North Sea, has now formally been awarded the Schooner field which is located in the Southern North Sea of the UKCS, in license block 44/26a.
Schooner was ‘shut-in’ despite material natural gas resources remaining due to the abandonments of ‘hub’ facilities and the pipeline to a market in the United Kingdom. However the Block, awarded to HALO (100%) as license P2578, is now focused on re-activation of Schooner and nearby exploitation to be re-directed to the Western Gas Transmission system and the Den Helder processing facilities in the Netherlands.
The Company currently owns 8.88% of WGT and, with partners, continues to examine opportunities in the UK near the border with the Netherlands. The absence of available infrastructure in the UK has created more opportunities for Dutch infrastructure nearby with numerous examples of such and the availability of processing, pipeline or facilities such as WGT offers.
HALO has been awarded 21.66% interest in the F5 and F4a licenses, offshore The Netherlands. HALO, Neptune and NAM have agreed a Joint Operating Agreement (“JOA”) for the F4a East and F5 licences, focussing primarily on shallow gas objectives. A separate JOA will likely be negotiated for the F4a West/Deep area, which will focus deeper objectives; operated by NAM (HALO 10%). Initial work by the partnership has yielded numerous shallow gas prospects. Based on that work and local analogues the initial shallow gas prospect indicates recoverable resource in excess of 70Bcf on its own.
The initial target in F5 is increasingly prospective, as well as other “look-alikes” nearby (i.e. F4a & F5), and the F4a/F5 partners work towards drilling the prospect(s) nearing the end of 2021 ((or early 2022) dependent on industry conditions at the time). The relative low cost of the planned well (F5-A) having high potential volumes, low risk, quality of partnership and availability of market makes all prospect makes F5 & F4a extremely attractive.
The status of the Greater Pegasus Area (GPA) became increasingly uncertain after the non-binding dispute resolution (NBDR) process instigated by the UK Oil and Gas Authority (OGA) in 2019. The results of subsequent drilling (eg. Andromeda) in GPA had also disappointed in terms of volumes and possible commerciality. The GPA was scheduled for final investment decision (FID) in April of 2019 but NBDR was initiated due to a dispute between adjacent operators of infrastructure with respect to the GPA and nearby facilities. The findings of the NBDR were made public yet no commercial solution was agreed between the Parties though concepts and studies were to be considered further.
Therefore; in the absence of a commercial solution since the cancellation of the FID, HALO decided to fully relinquish its equity participation in the GPA. The ongoing commitments and costs did not meet the Company’s requirements or strategy in the absence of any commercial solution for the GPA. HALO wishes its partners, local operators & OGA success in the future and thanks them for the quality of their efforts prior to the Company’s departure. HALO prefers to focus its capital and efforts now on projects which are lower cost, lower risk, higher return and closer to infrastructure within already agreed partnerships. Schooner & F5 represent such opportunities for continued growth within the Southern North Sea.
At the E10 and E11 licenses, offshore Netherlands, HALO and its partner Neptune Energy, have proposed to relinquish the licences with immediate effect. Given the prospects in the license area and the current economic climate, the partnership expects no exploration wells in the short or medium term. By giving up these licenses now, the partnership can achieve savings of about €330,000 per year per license. Also, the Company has again rationalized its portfolio to re-focus on the most prospective and cost-effective areas within the Southern North Sea currently. This leverages existing knowledge and experience and a rigorous review of the entire Corporate portfolio during the course of the year, so far.