Beacon Energy, the full-cycle oil and gas company with a portfolio of onshore German assets through its wholly-owned subsidiary, Rhein Petroleum GmbH ("Rhein Petroleum"), announces an increase in the Company's assessment of reserves in the Erfelden field incorporating the results of the recently drilled Schwarzbach-2(2.) ("SCHB-2(2.)") well.
∑ As previously announced, the SCHB-2(2.) well encountered a 34-metre gross interval containing 28 metres of oil-bearing net reservoirs in the Pechelbronner-Schichten ("PBS") sandstones within the Stockstadt Mitte segment of the Erfelden field.
∑ These oil-bearing reservoirs were encountered approximately 25 metres higher and 10 metres thicker than prognosis, with excellent porosities and no water-bearing sands in the Low Case 42m hydrocarbon column.
∑ In addition, following a revised well-to-seismic tie incorporating the PBS, which was encountered shallower than predicted in the SCHB-2(2.) well, re-mapping of the 3D seismic data indicates that the Stockstadt Mitte-1 well ("STKM-1") drilled by Exxon in 1986 penetrated the Meletta and Upper PBS reservoirs in the adjacent Schwarzbach South segment of the field. The Company's view is that the contingent resources associated with this segment should be re-categorised as reserves that are justified for development.
∑ The re-mapping also shows that there is no clear indication of a material fault offset between the Stockstadt Mitte segment and the adjacent Schwarzbach South segment. Beacon believes that there is a high likelihood that these segments are connected and share a common oil-water contact at 1616mTVDSS, which is supported by the updated mapping, the gas ratios data from the SCHB-2(2.) well, and the pressure data in the Meletta reservoir in the STKM-1 well.
∑ The Company's updated assessment of potential reserves for these two now proven and likely connected segments of the central part of the Erfelden field are:
Low Case : 4.72 MMbbls
Best Estimate Case: 7.24 MMbbls
High Case : 10.20 MMbbls
These new figures are the result of the thicker and higher quality reservoirs being encountered and the inclusion of reserves in Schwarzbach South.
∑ The SCHB-2(2.) well has been tied-back to the wholly-owned Schwarzbach Production facility to continue well clean-up operations.
∑ A rod pump is currently being installed. Commercial production is expected in the second half of November aided by the rod pump which has the capacity deliver up to a maximum rate of 250 barrels of oil per day ("bopd").
∑ It is expected that once the well is fully cleaned up and production has been sustained for a period, the rod pump will be replaced with an Electrical Submersible Pump ("ESP") which has higher capacity. As previously announced, based on the excellent reservoir properties and the light oil recovered from the SCHB-2(2.) well, standard oil-industry analysis indicates that an initial production rate in excess of 900bopd could be achieved with the installation of an ESP.
The original Field Development Plan ("FDP") was to develop the Stockstadt Mitte segment with two producer wells and a water injector. The Company is currently undertaking a full-field review to determine how best to develop the central part of the Erfelden field to optimise the value of the additional reserves demonstrated by the SCHB-2(2.) well.
A third-party independent Competent Person's Report ("CPR") on reserves will be commissioned subject to the outcome of the seismic reprocessing trials, a decision on a seismic reprocessing campaign and the modifications made to the FDP.
∑ Commercial production from the rod pump currently being installed on the SCHB-2(2.) well is expected in the second half of November during which the reservoir is expected to continue to clean-up.
∑ The expectation is that the rod pump will be replaced with an ESP in the middle of the first quarter of 2024 which has the capacity to optimise initial production from the well. The actual production will determine if any future interventions are required in this well.
∑ Subject to the results of the full-field review, the current FDP is likely to be superseded by a development programme with more wells over the central part of the Erfelden field to optimise the value of the additional reserves demonstrated by the SCHB-2(2.) well and the de-risked Schwarzbach South segment.
∑ An independent third-party CPR will be commissioned based on any seismic reprocessing and the update to the FDP.
The Company expects to provide a further update on the reservoir clean-up operation in the SCHB-2(2.) well after establishing a stabilised and sustained flowrate from the rod pump.
Beacon Energy Chief Executive Officer, Larry Bottomley commented:
"This internal assessment following the drilling of SCHB-2(2.) confirms the material impact the well has had on our reserve base in both the Stockstadt Mitte segment of the Erfelden field and the de-risked adjacent Schwarzbach South segment. As a result of the SCHB-2(2.) well, the Company believes that the Best Estimate reserves on the Erfelden field have increased from 3.8 mmbbls (pre-drill) to 7.2 mmbbls. The development of both segments that make up the central part of the Erfelden field will now be incorporated into a revised field development plan to realise the value from the material upgrade in the Company's assessment of reserves.
"We remain fully focused on bringing SCHB-2(2.) into optimal production as quickly as possible. We are working hard across all aspects of the subsurface evaluation and we are undertaking a comprehensive review of the drilling and completion operations to incorporate these learnings into an updated field development plan to deliver this additional value.
"We look forward to providing an update on the clean-up and production from the well in due course."