Greater Stella Area Operations Update
Thursday 12 January 2017
The Company's 2017 operational programme is dominated by start-up of the Stella field and the commencement of Harrier field development activities.
Stella Start-up Schedule
Preparation for start-up of the Stella field is well advanced, with only completion of the previously announced fault remediation works on the FPF-1 electrical junction boxes outstanding prior to the delivery of first hydrocarbons. The inspection and repair programme has been progressing well, with the work now in the latter stages of completion, although challenging offshore weather conditions have impacted the pace of activities on the vessel at times. Conclusion of the work is now expected to push the commencement of Stella production into February 2017.
Harrier Development
In line with the Company's strategy for building out the GSA production hub, investment in the Harrier field development programme will commence during 2017. The development involves drilling of a multilateral well into the two reservoir formations on the field, with the well tied back via a 7.5 kilometre pipe to an existing slot on the Stella main drill centre manifold for onward export and processing of production on the FPF-1.
The GSA joint venture has contracted with Ensco Offshore UK Limited for the provision of a heavy duty jack-up drilling rig, which is expected to arrive on location in the second quarter of this year. The drilling programme is forecast to be completed in the second half of 2017 and the subsea infrastructure installation activities in summer 2018, resulting in the anticipated start-up of Harrier production in the second half of 2018.
The net capital expenditure associated with execution of the development over 2017-18 is approximately $75 million, equating to a development cost of significantly less than $10/boe1. This represents a cost reduction of approximately fifty percent from that originally forecast. The substantial reduction in capital expenditure is driven by both detailed well engineering design work that has enabled the move away from drilling two individual wells to one multilateral and securing attractive contracting terms across the supply chain.