Independent oil and gas company i3 Energy has signed a Letter of Intent with Dolphin Drilling for a multi-well drilling campaign this summer across the company’s 100% owned and operated Liberator field and Serenity prospect.
The news has been met with investor enthusiasm, with i3’s share price jumping over 18% to 61.5p.
Estimates of the Liberator field and Serenity prospect indicate the wells hold over 500 million barrels of oil combined.
With a first spud set to take place in June, i3 will drill an appraisal well Liberator West, with the expectation of converting resources to reserves there. A first production well for Liberator Phase I will then be drilled, followed by a well, S1, in the Serenity prospect.
The company believes the S1 well at Serenity is a material extension of the Tain discovery, an adjacent unclosed oil-bearing structure.
If Phase I is completed according to plan, i3 intends to place a second Phase I production well which, when brought onstream with the first production well, has a potential output rate of up to 20,000 bopd by mid-2020. To maximise infrastructure utilisation, a third Phase I will is expected to be delivered in mid-2021.
The company’s goal is to deliver first oil from Liberator Phase I and they have begun offtake term negotiations with a “a number of infrastructure providers” in order to stick to this timeline.
Upon the successful appraisal and development of the Liberator field and Serenity prospect, i3 argues the production rate from its current licenses could be over 200MMbbls.
Last month, i3 received indicative terms from Repson Sinopec UK for Liberator’s use of their leased Bleo Holm FPSO facility. The offer is a significant advance for i3’s North Sea ambitions as it grants them access to the necessary infrastructure, which otherwise requires immense capital expenditure.
Moving forward, i3 is hoping to set a bid date next month for potential JV farmout partners, as the company expects the drilling campaign to cost around $41 million with addional capex to 2020 first oil of around $90 million, which includes considerable contingency.
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