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Dry times ‘challenging’ for North Energy

by on July 31, 2012 8:49 am GMT
 

The
Oslo-listed company, which has seen its share price and bottom line take a
beating on a succession of dusters, has now suffered a further drilling setback
after a wildcat at the Wintershall-operated Kakelborg prospect in the North Sea
came up dry.

North
Energy, which holds 10% in the prospect in Production Licence 370, has
previously been hit by drilling failures at the Storebjorn (Big Bear) prospect,
also in the mature North Sea, and the Zapffe and Heilo targets in the frontier
Barents Sea.

Chief
executive Erik Karlstrom told Norwegian state TV channel NRK the latest duster was naturally “disappointing” for the company.

“It means
that we have a challenging situation right now, not least in relation to the
outside world. It is easier for us within the company to know whether or not
what we are doing is right,” he said.

The company
has so far made only two discoveries out of a total of seven wells drilled off
Norway, but Karlstrom insisted its find rate is still in line with the industry
average of around 30%.

He also
pointed to the “ketchup effect” in exploration whereby discoveries can come on
the heels of a run of dry wells, citing the example of Det Norske Oljeselskap
with its success at the giant Johan Sverdrup find.

The company
is now hoping at least one of its three remaining wells to be drilled this year
will come up trumps.

Its next
probe is targeting the Jette gas condensate prospect in the Norwegian Sea and
is set to be drilled by the rig West Alpha in Statoil-operated Production
Licence 385 in August.

This will
be followed by wells to be drilled at Frode in PL299, using the rig Maersk
Giant, and Skagen in PL498, using the rig Maersk Guardian, in the fourth
quarter. Both are oil prospects.

Meanwhile, Karlstrom
is looking forward to an appraisal that could be drilled at the Total-operated
Norvarg gas discovery in the Barents Sea, in which North Energy holds a 25%
stake, early next year.