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Oil Companies Bet Big On This Mature Oil Play

UK continental shelf rig

Historic week in the oil and gas industry. With one of the world’s most well-known exploration destinations unveiling a slate of next-generation projects.

The U.K. offshore.

Late last week, the U.K. Oil and Gas Authority announced the results of a unique bid round for exploration licenses in frontier ocean areas. Representing the first time the nation has carried out such a frontier round in 20 years.

The results were strong. With the authorities announcing offers of 25 licenses to 17 different companies, covering a full 111 oil and gas blocks.

Officials haven’t named the successful bidders yet. But did mention that the winners included “established firms” as well as “first-time entrants to the basin” — suggesting that we’ll see some new players in this part of the world soon.

The strong interest in this frontier round is an important point for the global industry. Showing that even mature play areas can still yield big leads — if advanced technical analysis and the right fiscal terms are applied.

In this case, technical work by the U.K. government played a major role. With authorities having funded $25 million to collect 40,000 square kilometers of new seismic over the frontier Rockall and Mid-North Sea High areas — all of which was made available to bidders, to look for new leads in these emerging plays.

The continuing prospectivity of the U.K. offshore was underscored by another piece of news yesterday. When junior developer Hurricane Energy unveiled a new oil find that it says is “the largest undeveloped discovery on the UK Continental Shelf.” Related: Shell’s New Permian Play Profitable At $20 A Barrel

Those claims were backed up by results from Hurricane’s recently-drilled offshore Halifax well. Which appears to have extended a major oil pool previously detected by the company — occurring in unconventional reservoir rock, namely fractured basement granites.

Hurricane estimates that this frontier discovery could hold over 3 billion barrels in oil resource.

Further demonstrating how big pools are still waiting to be found in this mature petroleum province.

All of which suggests interesting results could be ahead for this week’s bid round winners. Watch for the identities of the firms involved, and for more details on project plans — with at least three wells reportedly coming in the near to medium-term.

Here’s to stepping out.

By Dave Forest

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