Spirit Energy Ltd., the exploration and production joint-venture of Centrica Plc and Bayerngas Norge AS, said Sept. 3 it will fund a $180 million campaign to drill three wells 100 kilometers west of Shetland in licenses operated by Hurricane Energy.
Hurricane Energy in the first quarter 2019 will begin drilling a single horizontal appraisal well in Lincoln, and two horizontal exploration wells on the Warwick prospect, estimated to hold 604 million barrel of oil equivalent of 2C contingent resources and 935 million boe of prospective resources respectively.
As part of the farm-in agreement Spirit Energy will fund 100% of the initial drilling campaign from its cashflow.
Assuming success in these first three wells, Spirit Energy and Hurricane will target a tie-in of one of the initial wells to the Aoka Mizu Floating Production Storage and Offloading, or FPSO, facility, and potentially a further three appraisal wells and full field development of the Greater Warwick Area. If these additional phases proceed, Spirit Energy will carry 50% of Hurricane's costs of the tie in of the well to the FPSO and pay a bonus payment of between $150 million to $250 million towards Hurricane's costs of the full field development, contingent on a positive final investment decision.
At the development stage, Spirit Energy would become license operator.
The Greater Warwick Area, which neighbors Hurricane Energy's Greater Lancaster Area, is made up of oil-bearing fractured basement reservoirs. Hurricane Energy previously drilled an exploration well in the Lincoln area in 2016, proving up resources in the area.