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Summary
- Successful mobilisation of equipment required to complete and test the B-1Z well at West Newton started on 24 May.
- Reabold holds an approximate 56% economic interest in West Newton through its 59% shareholding in Rathlin.
- The test at B-1Z well will inform the optimal way to drill and complete the horizontal B-2 well.
Reabold Resources PLC is an upstream oil and gas investment company that invests in projects with low technical risk and high potential returns. As a result of market conditions, the company is able to invest in such projects at a low entry cost, fund the activity required to fully de-risk it and potentially generate supernormal returns through monetising the asset. Reabold typically invests in the operating company of a project allowing Reabold the flexibility to deploy capital quickly and effectively. The company’s aim is to recycle capital from the monetisation of projects and redeploy a portion of the proceeds into larger, value accretive opportunities.
The company follows a strict selection criterion for its investments, which include West Newton-UK, Reabold California, Parta-Romania, and Corallian-UK.
West Newton
Reabold holds around 56% economic interest in West Newton through its approximately 59% shareholding in Rathlin. Rathlin holds a 66.67% interest in the West Newton discovery, located in the onshore licence PEDL 183. Reabold also has a 16.665% direct license interest in PEDL 183.
In 2019 and 2020, Reabold announced the discovery and appraisal of the West Newton field, which contains both gas and liquid hydrocarbons. The results from the drilling suggest that this is the largest UK onshore discovery since 1973.
West Newton is quite close to existing gas pipelines and related infrastructure, which potentially supports fast monetisation of the asset, in line with the company’s strategy.
Operational Update at West Newton
The key next steps in demonstrating the field’s value are the flow testing of the B-1Z and A-2 wells. Accordingly, the successful mobilisation of equipment required for this programme commenced on 24 May. The equipment that has been mobilised to the site includes a workover rig, well test package, CEB burners (incinerators) and a wireline unit.
The equipment will be rigged-up during the first week of operations. Subsequently, the completion activities will commence, which also include perforation and well treatment operations. All these operations will be followed by the well test.
The West Newton B-1Z completion and testing operations are aimed at flowing hydrocarbons from the conventional Kirkham Abbey Formation. The overall time required to complete the testing operations is approximately six weeks. The testing of the A-2 well will follow on from the B-1Z testing programme.
GaffneyCline, an international petroleum and energy consultancy, has given AA rating to the West Newton field in its study. This rating was given due to its low-carbon intensity and emissions standards being significantly lower than the UK average.
Image Source- Company Presentation
Way forward
Reabold Resources, with the operational progress at West Newton in the form of testing of the B-1Z well, has moved a step forward, as the test will help optimise the drilling of the horizontal B-2 well, which is already permitted for drilling and testing. It is going to be a deviated well within the Kirkham Abbey to maximise productivity and flow rate.
