Venture Production yesterday revealed that results from an exploration well on its 100%-owned Andrea gas prospect in the southern North Sea were disappointing.
The Aberdeen-based oil and gas operator previously said Andrea had the potential to be its biggest discovery to date.
The company said yesterday the well had encountered gas in sands at upper levels, but indications were that the reservoir was tight and was unlikely to flow without stimulation.
It said the well, on block 48/15b in Venture’s A Fields production hub, where the company has a 100% interest, had met lower-level sand which appeared to be water wet, based on an initial analysis of the logs, although the tight nature of the reservoir made interpretation of the exact gas/water contact difficult.
The well will now be suspended pending further analysis of well logs and core samples.
The Aberdeen firm said the potential of the Andrea gas discovery for commercial development would now be assessed, although the tight nature of the reservoir was likely to constrain recoverable reserves to the lower end of pre-drill expectations of 3-44million barrels of oil equivalent.
Consequently, any development of Andrea would most likely be in conjunction with the nearby Ensign field, the company added.
Venture chief executive Mike Wagstaff said: “We have already added significantly to our reserves base this year and while the Andrea result is disappointing after initial positive indications, our success with the five previous wells we have already drilled in 2009 puts us in a great position to continue to grow our production over the next few years.
“We hope to add further successful wells in the second half of this year and our programme continues with the Whitbeck exploration well in the East Irish Sea, which is currently drilling, and the East Annabel appraisal well, which we will start when the rig has finished operations on Andrea.”
Venture is the subject of an 845p-a-share offer from British and Scottish Gas parent Centrica.
The group, which first took a stake in Venture in March at 725p a share, has since then upped its holding to 29.9% by buying more shares at 845p.
Although two of Venture biggest shareholders have backed the Aberdeen company’s directors’ rejection of Centrica’s hostile bid, and urged other shareholders to hold out for at least £10 a share, Centrica is seeking to win over more major shareholders at the 845p a share level.
Centrica has already said it will not increase its offer, although reserving the right to do so if a rival bidder should emerge.
Venture shares closed yesterday down 2p at 832p.