REG-Borders & Southern Operational UpdateReleased: 21/01/2009
com:20090121:RnsU9732L
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RNS Number : 9732L
Borders & Southern Petroleum plc
21 January 2009
21 January 2009
Borders & Southern Petroleum plc
("Borders & Southern" or "the Company")
Operational Update - Initial Review of 3D Seismic Interpretation
Borders & Southern is pleased to announce an initial review of its 3D seismic
interpretation. The 3D survey, acquired in 2008, covers an area of 1,492 sq km,
representing approximately 7.6% of Borders & Southern's total licensed area. The
survey was designed to target some of the largest high-graded leads that had
been identified on the Company's 2D seismic data.
Whilst the technical interpretation will continue, the initial phase is now
complete. The Directors believe that all of the Company's pre-3D objectives have
been achieved. These were: to reduce the technical risk; to deliver a high
quality prospect inventory; to validate the direct hydrocarbon indicators
identified on the 2D seismic lines; and to identify well locations on
prioritised prospects. Below we describe the key play fairways mapped along with
two prioritised prospects.
The technical work has highlighted three principal play fairways:
* A seismic amplitude supported Lower Cretaceous play fairway,
* An Upper Cretaceous / Lower Tertiary structural play fairway
* A Tertiary seismic amplitude supported play fairway.
Within these play fairways, multiple prospects have been generated that, in
common with analogous geological settings, could deliver in the success case
multi-billion barrels of total recoverable reserves.
The 3D has revealed plenty of evidence for hydrocarbon generation and migration
in the area. This includes a chain of five anticlines with gas hydrates located
above the crests or slightly displaced on the asymmetric limb of the folds.
Additionally, there are many seismic amplitude anomalies throughout the survey
area.
Lower Cretaceous play fairway
The Lower Cretaceous play fairway comprises sandstone reservoirs within tilted
fault blocks and submarine fans. The prospects are enhanced by seismic amplitude
anomalies that display a strong AVO response which could be indicative of
hydrocarbons. Our prioritised prospect within this play fairway is the Darwin
prospect. In detail, it comprises two separate tilted fault blocks but which may
be joined as one large accumulation. This prospect is located up dip of a
regional migration pathway to a large source kitchen. Down dip of the prospect
location, the source rock is modelled to be currently sitting in the oil
generation window and therefore oil is the most likely hydrocarbon phase to be
encountered.
The prospect is structurally robust, partly fault and dip closed. There is a
strong AVO anomaly associated with the target reservoir which clearly switches
off at the bounding faults and at a closing contour on the dipping surface. The
total measured area for the AVO anomalies is 26 square kilometres. Potential P50
recoverable reserves estimated for the area defined by these AVO anomalies alone
are 300 million barrels. However, if the accumulation extends down to the mapped
closing contour then the accumulation would be significantly larger. This
prospect has the added attraction of potentially deeper reservoir targets that
fall within structural closure leading to the possibility of stacked
reservoirs.
Upper Cretaceous / Lower Tertiary structural play fairway
The Upper Cretaceous / Lower Tertiary structural play fairway comprises
sandstone reservoirs within major structural closures measuring up to 150 square
kilometres. Our prioritised prospect within this play fairway is the Stebbing
prospect. It has a structural closure measuring 85 square kilometres. The
structure is a simple fold with four way dip closure and a thrust located in its
core.
There is a well developed gas hydrate above the crest of the fold a few hundred
metres below the sea bed. Potential P50 recoverable reserves for the Upper
Cretaceous / Lower Tertiary reservoir are 570 million barrels of oil. Additional
reserves from the possibility of stacked reservoirs occur deeper within the
structure. If this play fairway is successful, there are numerous robust
structural closures within the portfolio that could deliver very large volumes
of hydrocarbons.
Tertiary seismic amplitude supported play fairway
The Tertiary seismic amplitude supported play fairway comprises Tertiary deep
water distributary sandstone reservoirs partly stratigraphically trapped within
structural closures. The play is marked by strong seismic AVO anomalies which
could be indicative of hydrocarbons. The play extends over several structural
culminations including the Stebbing prospect. Potential P50 recoverable reserves
estimated for the Tertiary reservoirs in the Stebbing structure are 710 million
barrels of oil.
Prioritised prospects
The Darwin prospect has been prioritised due to its robust structure, its
location at a migration focus within the basin, and the strong AVO support.
There are good analogues for this prospect within the Magallanes Basin located a
few hundred kilometres to the west of this area where reported recoverable basin
reserves have yielded approximately 6 billion barrels of oil equivalent.
The Stebbing prospect has been prioritised due to the ability to test two
separate play fairways, strong AVO anomalies at one reservoir level and the
presence of a gas hydrate above the structure.
The Darwin and Stebbing prospects are currently assessed as having the best
chance of success and will be progressed to drill-ready status. Other than
sharing the same source rock they are completely independent, allowing different
aged rocks and different trapping configurations to be tested. Whilst these two
prospects are currently the preferred first tests, the prospect inventory now
has significant depth and with additional work alternative prospects may be
high-graded.
If success is achieved during the initial drilling programme there is plenty of
scope for developing the prospect inventory outside the current 3D area. The
mapped play fairways extend outside of the survey area and leads have already
been identified.
With the initial interpretation phase completed it is the Directors' intention
to seek partners in order to help finance the drilling programme. This will be
initiated in the first quarter of 2009. With relatively low oil prices and mid
to large exploration companies reducing their discretionary expenditure this is
clearly not the optimum time for seeking partners but the Board believes that is
has some high quality prospects of significant scale which hopefully should
attract interest.
Commenting on the 3D results Harry Dobson, Borders & Southern's Chairman said:
"We're delighted with the outcome of the 3D interpretation. The prospects are
large, offering attractive and exciting drilling targets. The two independent
prospects, Darwin and Stebbing, are excellent examples of the quality and depth
of the Company's exploration portfolio. Due to the seismic amplitude support for
these prospects, the Directors believe that they offer relatively low
exploration risk for an untested frontier basin. As a consequence, the Directors
have increased confidence in the ability of the portfolio to deliver commercial
success for our shareholders".
Notes
Care should be taken when reviewing prospect reserves in undrilled frontier
basins. In the absence of hard geological data from well penetrations judgements
have to be made about input parameters into the reserves calculation. However,
confidence can be placed on the prospect aerial closures as these are based on
maps generated from 3D seismic interpretation.
The prospect names are based on crew members and passengers of HMS Beagle which
stopped in the Falkland Islands during its famous voyage to the Galapagos
Islands and surveying work of South America. In 2008 it was the 175 year
anniversary of the Beagle's visit to the Falkland Islands.
REVIEW BY QUALIFIED PERSON, QUALITY CONTROL AND REPORTS
The results of the Company's technical evaluation have been reviewed, verified
and compiled by the Company's geological staff (including Dr Howard Obee, a
petroleum geologist with over 20 years relevant experience, Fellow of the
Geological Society and member of the American Association of Petroleum
Geologists and the Petroleum Exploration Society of Great Britain) for the
purpose of the Guidance Note for Mining, Oil and Gas Companies issued by the
London Stock Exchange in respect of AIM companies, which outline standards of
disclosure for mineral projects.
For further information, please visit www.bordersandsouthern.com or contact:
Borders & Southern Petroleum plc
Howard Obee, Chief Executive 020 7661 9348
Panmure Gordon (UK) Limited
Katherine Roe 020 7459 3600
Ocean Equities Ltd
Guy Wilkes 020 7786 4370
Tavistock Communications
Simon Hudson 020 7920 3150
This information is provided by RNS
The company news service from the London Stock Exchange
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