Paydirt for Jan. 31, 2018: Pennine concession, Shell drill target share intriguing parallels

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Velca, Shpirag and the String of Pearls (Part 1 of 3)

Shell’s Shpirag project and Pennine Petroleum’s Velca Block target are separated by about 50 kilometres of rugged mountainous Albanian terrain.

In terms of geology and hydrocarbon potential, though, there are some striking parallels.

Shell Albania Upstream, a subsidiary of Royal Dutch Shell, recently began drilling its Shpirag-4 appraisal well—the fourth well targeting the Shpirag deposit, which lies within the Block 2 and 3 concessions operated by Shell.

Pennine received final government approval for its own Production Sharing Agreement (PSA) for the adjacent Velca Block with Albpetrol Sh.A, Albania’s national oil company, in late November.

All three concessions lie along the so-called “String of Pearls” fault lines, a parallel set of fault-controlled reservoirs, from which much of Albania’s oil production is generated.

“We see striking similarities here,” says Pennine CEO N. Desmond Smith. “Frankly, what drew Shell and others to Shpirag is precisely what drew us to Velca and a PSA with Albpetrol for this favoured concession.”

Shpirag’s reservoir depth is proven at 5,400m to 6,500m, while the more western Velca reservoir is significantly shallower at 2,200m to 3,400m.

Pennine’s geophysical team is poring over seismic data to determine a drill location for the Ramica structure target. Mr. Smith expects that production targets would be similar to the Shpirag-2 well, which was drilled by a Shell-Petromanas joint venture in 2013.

As part of that operation:

  • The upper 50m of a drilled gross pay of 294m were well tested;
  • Tests yielded 1,154 barrels of 37-degree API-gravity oil, 48 barrels of gas liquids, and up to 5 million cubic feet of gas per day—all from just 50m of a potential 1,000m;
  • Geophysical control indicates potential gross pay closure of 1,000m.

 “As we know from last year’s independent resource estimate, our Ramica target structure in the Velca Block has a best-case prospective resource estimate of 26.5 million barrels of recoverable hydrocarbons,” says Mr. Smith.

The Shpirag reservoir has been drill stem tested at about 2,000 BOE per day. Its drilling history also includes:

  • Shpirag-1, drilled by Occidental in 2001 to a depth of 5,333m, with an upper-zone test of 400 barrels of 37-degree API gravity oil;
  • Shpirag-3, drilled to greater than 6,100m and suspended due to technical drilling difficulties;
  • Shpirag-4, spudded in mid-December 2017.

(Check back with Pennine’s Paydirt channel to read Parts 2 and 3 of the Shpirag, Velca and the String of Pearls series)