Serica Kicks off Work at Third Rhum Well
London-listed Serica Energy has begun intervention work at the R3 well at the Rhum gas field in the North Sea, it said on October 12.
Awilco Drilling's WilPhoenix semi-submersible rig arrived on site and has been installed, Serica said. The work will run for 70 days.
Rhum has been producing gas since 2005 and and its original development plan involved three wells tied back to the Bruce platform. Former operator BP brought on stream two wells but the third, R3, was never put into production.
Serica, which acquired BP's position at Rhum in late 2018, plans to start flowing gas from R3 in early 2021. The well is already attached to subsea infrastructure, meaning its launch will not lead to any significant extra CO2 emissions.
Work at R3 will involve recovering equipment left in the well and removing an obstruction believed to be in place across parts of the downhole completion. The well will then be recompleted.
Serica netted 13,775 barrels of oil equivalent/day from Rhum last year. It has a 50% stake in the project, while National Iranian Oil Co holds the remaining interest.
The company also owns 98% and 100% shares respectively in the nearby Bruce and Keith gas fields, as well as a 18% interest in the North Sea's Erskine field. It benefitted in the first half of the year from hedging around 50% of its gas production. Gas accounts for 80% of its output, which averaged 21,600 boe/d in January-June.
Serica noted that average Heren NBP day-ahead spot gas prices had recovered to £0.35 ($0.46)/therm this month, from under £0.10 during the early stages of Covid-19 restrictions. Its hedging scheme will continue to provide support into 2022, it said.
The company added it had installed the seabed tie-in structure of the Columbus field in late September. That field will net Serica 3,500-4,000 boe/d of output at full capacity, but Serica has pushed back its start-up from the first half to the second half of 2021.
"We are entering an exciting period of value-adding operations," Serica CEO Mitch Flegg commented. "The R3 intervention project has the potential to add significant production volumes and can provide valuable optionality to the management of Rhum wells and reservoir. The Columbus development will add further production and diversity to our portfolio."
Production levels remain strong, gas prices have recovered significantly and the gas futures price outlook is good, he said.
"Our balance sheet remains robust with significant cash reserves, no debt and limited decommissioning liabilities," the CEO continued. "This will enable us to execute these projects whilst simultaneously continuing to look to take advantage of current market conditions by pursuing opportunities to further expand our portfolio."