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Newcomer Seapulse more than happy to play risk game

Seapulse chief executive Scott Aitken
Seapulse chief executive Scott Aitken

Recognising that exploration is an inherently risky business is the name of the game for newcomer Seapulse, which is working out new ways to play it.

The Bermuda-headquartered firm was established last year and recently farmed into its first prospects in the UK North Sea.

It is targeting billions of barrels of oil around the globe, and chief executive Scott Aitken believes, for a small company, that requires some challenging of convention.

He said: “The Seapulse approach is a recognition that exploration is a fundamentally high-risk venture but it is also at the phase of the exploration and production spectrum where the rate of change of value is at its greatest.

“We’re very much aware of this in the industry and the challenge has been that the chance of success is fundamentally not 100% .

“Our view is that the key to exploration success is for it to be undertaken on a relatively massive scale with a large portfolio so that any one, two or three discoveries in a large portfolio more than pays for the entire cost of drilling and provides us with a substantial return.

“We recognise that an inevitable part of exploration is dry holes.”

The firm’s portfolio has been built with this in mind. It is estimated to hold gross resources of 17 billion boe in regions such as Europe, southern Africa and Latin America.

Since being set up last year by private equity house Seacrest Group and I-Pulse, Seapulse has also formed partnerships with EnQuest and Maersk Drilling.

Mr Aitken said they try to identify the best prospects available across each area they operate in through a “basin master” approach. This is when you want to start from a position of having data over the entire prospective basin, rather than just acquiring a licence and then acquiring data on your own postage stamp.

“We wanted to have a basin overview first and then acquire licences where we saw the best features and then acquire high-definition 3D seismic on the best features,” he said.

“In doing that both Seacrest and I-Pulse had generated combined prospects in seven different basins across the world.

“In each basin we had the largest amount of data of any single participant, or the equal largest data access, and that was quite an advantage to drive our basin standing and then our licensing process. Having licensed in combination over 30 licences in these different basins, we high-graded the 12 best prospects we had in our inventory, and that is the Seapulse portfolio that we have built and has been announced.”

In May, Seapulse farmed into the Boaz and Hinson prospects in the central North Sea, owned by Azinor Catalyst.

“We identified these two prospects in the middle of last year as meeting the sort of Seapulse attributes that we’ve been seeking,” he said.

“They have been the product of a high amount of data which has given us confidence in many of the assumptions that have been utilised.

“Azinor has done a very good job in identifying significant prospects in the North Sea.

“I think we’ve all been encouraged by the recent Glengorm success in the North Sea by Cnooc and Total, which is in the adjacent licence to one of our prospects, Hinson.”

At time of writing, work is under way on farming into a third Azinor prospect, Goose, with the trio holding an estimated 495m boe.

Mr Aitken is a petroleum engineer who began his career in Aberdeen 27 years ago with ExxonMobil and has held senior roles with several companies, including as head of High Power Petroleum, I-Pulse’s oil and gas division.

Seapulse’s partnerships with Maersk Drilling and EnQuest are intended to keep the firm lean.

Mr Aitken added: “In many ways we’re challenging some of the ways business has historically been done and we’re happy to explain some of our partnerships.

“We very much focus Seapulse to be a very lean explorer. We are a private company and we want to be operating in the top tier.

“Maersk Drilling is responsible for delivering the entire well scope and all the subcontracts, which means Seapulse can maintain a lean staffing that is more focused on technical and operational matters, rather than contractual and supply chain which we saw as frankly just duplication.

“The alliance with EnQuest, the strength they have in the independent E&P sector was very much top tier. By forming an alliance with EnQuest, we could tap into that engineering and operating expertise to avoid us having to duplicate that.

“We are all trying to eliminate duplication and leverage one-another’s strengths. We felt this was one way that could be undertaken.”

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