Spirit to Operate UK's Babbage
UK Spirit Energy has reached agreement with its partners in the UK Babbage gas field to take on operatorship of the licence, where it holds a 13% interest, it said July 6. This also opens up further drilling in the region, which the company says it plans to pursue next year.
The Centrica-Stadtwerke Munchen joint venture will also take on operatorship of the nearby Cobra discovery, where it holds a 50% interest and plans to drill an exploration well at the adjacent Python prospect.
Transfer of operatorship from the existing operator, Premier Oil, is subject to completion of the divestment of Premier Oil’s 47% interest in Babbage and 50% interest in the Cobra licence to Verus Petroleum, a deal announced late April, and securing relevant regulatory approvals. Dana Petroleum is the other partner in Babbage with 40%. Premier acquired its Babbage stake from Germany's E.ON in 2016.
Operatorship of the Greater Babbage Area is in line with Spirit Energy’s strategy as a northwest Europe-focused oil and gas operator, and will benefit from Spirit Energy’s long experience and expertise in operating gas fields on the UK Continental Shelf, particularly in the Southern North Sea.
Spirit Energy CEO Chris Cox said: “Becoming operator at Babbage is an excellent adjustment to Spirit Energy’s portfolio – it is an asset and an area we know well and we are looking forward to working with our partners to maximise the value of the field. With an exploration well at the nearby Python prospect to come in Q2 2019, we see significant opportunities to build on the Greater Babbage Area and boost production further from a field which is expected to produce gas for many years to come.”
Babbage, which first came on stream in 2010, is produced via a normally unmanned installation 55 miles off the east coast of the UK and has a year-to-date 2018 average production of around 5,600 barrels of oil equivalent (boe)/day.
Spirit Energy last year produced around 50mn boe, and 2P reserves of 363mn boe and 2C resources of 216mn boe as at the end of 2017. Spirit Energy has operated and non-operated interests across the UK, Norway, the Netherlands and Denmark, with 28 producing fields and more than 70 exploration licences.