Netherlands

Country Summary

Non-operated working interest in 2 groups of shallow-water licenses: GEms and 4Quads.

Asset

Area (KM2)

Working Interest

Seismic Coverage

Technical Maturity

Operator

GEms

515

22.5~27%

2D/3D

Exploration, appraisal

& development

Oranje-Nassau Energie

4Quads

1,100

45%

2D/3D

Exploration

Oranje-Nassau Energie

GEms is a well-defined low risk prospectivity in the multi-tcf basal Rottliegends play. A first exploratory well in the summer of 2017 indicated the presence of natural gas.

Location and Geology

The GEms area, named for its location as the gateway to the Ems estuary, is located south of the 4Quads asset. GEms is an extension of the basal Rotliegend play recognised in both the 4Quads and H&L Blocks immediately to the north. 

The GEms area is situated approximately 20km north of the island of Schiermonnikoog offshore Netherlands and its eastern boundary follows the German-Dutch median line, confirmed by the supplementary Ems-Dollart Treaty executed in October 2014. The water depth ranges from 10m to 30m.

The prospectivity identified in the GEms area is the Lower Rotliegend Findorf play of the Elbe sub-group. The reservoir interval in this area is younger than the 4Quads and H&L Blocks Havel Sandstones but bears many similarities. The reservoir consists predominantly of fluvial and aeolian facies deposited in topographic lows related to the Base Permian Unconformity, sourced from the Lauwerszee Trough to the south.

Several wells within the region have encountered the Findorf Sandstone interval up to 35m in thickness. Historically the key risk in the GEms area was considered to be reservoir development. However, propriety seismic inversion of the released 3D volumes have enabled the reservoir interval at the wells to be calibrated to the seismic volumes and the sands mapped directly. As a result, a number of structurally simple low risk prospects have been identified within the GEms acreage.

The first exploratory well N05-01 took place in the Ruby gas field and resulted in the Ruby gas discovery in September 2017. The well was the first well in the area to be drilled on 3D seismic and proved reservoir can be discriminated on seismic and de-risks the play fairway. The N05-1 exploration well encountering gas in the target basal Rotliegend sandstones. The well further appraised the reservoir distribution and delineated the structure with a downdip geological side-track which also encountered gas.  The reservoir interval was cored throughout and 24m of net sand was encountered with high permeability.  This was confirmed by the DST in the vertical well which was flow tested at a maximum sustained flow rate of 53 million standard cubic feet per day, which was the limit of surface equipment. The results of the well exceeded pre-drill expectations.

A second exploratory well N07-04 was spudded in February 2018 targeting the Tanzanite prospect. 

Equity Interests

Discover, through its wholly owned subsidiary Hansa Hydrocarbons Limited, participates in 3 exploration licences and one production licence in the GEms area.

Licence Working Interest Awarded/Acquired Licence Type Joint Venture Partners
N04 27% 14 March 2015 Exploration

Oranje-Nassau Energie (ONE) –
33% Energie Beheer

Nederland (EBN) – 40%

N05 27% 14 March 2015 Exploration ONE – 33% EBN – 40%
N07c 22.5% 14 February 2015 Production ONE – 27.5% EBN – 50%
N08 27% 14 March 2015 Exploration ONE – 33% EBN – 40%

Operator

The GEms licences are operated by ONE.

Licence Status

The N04, N05 and N08 exploration licences have a five-year term and the N07c production licence a nineteen-year term. The three exploration licences have been granted with a common work programme with drill or drop decisions after three years. 

The first GEms exploration well N05-01, drilled using the Paragon Prospector 1 jack-up rig, was operated by ONE on the cross-border Ruby prospect in 2017.

Various export options are under investigation for the Ruby discovery to determine the economic viability of the gas accumulation. There is extensive offshore gas production infrastructure in the vicinity which could facilitate the processing and export of GEms gas, including that from any future discoveries. Should a development take place, the necessary plans and activities will first require regulatory approvals from the authorities with the appropriate public consultation process. The proximity of the potential developments in the 4Quads area to the north and the H&L area to the east of the GEms area presents the opportunity upon success for strategic synergies for optimising development and infrastructure schemes for the play and region as a whole.

If it turns out that gas can be successfully and economically extracted from the gas fields, the relevant permits will be applied for. An Environmental Impact Report (EIA) will be drawn up for this purpose, which must be presented with the application. It is expected that the total permit process will take several years before any gas extraction can be started.

4Quads - An overlooked play that has game changing potential for the Dutch offshore.

Location and Geology

The 4Quads licences are located in the Dutch North Sea adjacent to the German/Dutch median line with the mid-point 68km north of the mainland. The water depth ranges from 27m to 40m. The 4Quads are bounded to the east by the H&L Blocks, in which Discover has a 40% participating interest and to the south by the N04 GEms licence in which Discover holds a 27% participating interest.

The 4Quads project is a key asset in Discover’s portfolio. Discover has been able to capitalise on its unique position in the adjacent H&L Blocks where new data and a revised understanding has allowed a play extension to be delineated in the adjacent 4Quads. With conventional prospective resources in excess of 1 tcf of gas-in-place, the 4Quads are a strategically significant potential resource for the Netherlands. In summer 2014, a large 3D seismic survey over the 4Quads was acquired to better define the prospectivity.

The prospectivity identified in the 4Quads is an extension of the Lower Rotliegend Havel play that has been tested successfully in the adjacent H&L Blocks in Germany and is a significant producing reservoir onshore Germany in fields such as Soehlingen, amongst others. The L1-2 Well drilled in 2010 in the H&L Blocks in particular has demonstrated significant sand development in the area. In the 4Quads a mega closure (>100km2) has been mapped across the four blocks. This closure was tested by two NAM wells (G18-1 and H16-1) in the 1980s, both of which encountered gas in thin Carboniferous and Lower Rotliegend (Havel) sandstones. Proprietary work recently undertaken has demonstrated the likely development of thicker Havel Sandstones over SW and NE parts of the mega closure. Numerous prospects have been mapped within the mega closure, of which Kampen main is the largest prospect.

Equity Interests

Discover, through its wholly owned subsidiary Hansa Hydrocarbons Limited, participates in 4 exploration licences in the 4Quads area. The licences were originally awarded in September 2012, with EBN, the Dutch state entity, opting to participate in the licences at a level of 40%.

Licence

Working Interest

Awarded

Licence Type

Joint Venture Partners

G18

45%

17 September 2012

Exploration

Oranje-Nassau Energie (ONE) – 15%

Energie Beheer Nederland (EBN) – 40%

H16

45%

17 September 2012

Exploration

ONE – 15%

EBN – 40%

M3

45%

17 September 2012

Exploration

ONE – 15%

EBN – 40%

N1

45%

17 September 2012

Exploration

ONE – 15%

EBN – 40%

Operator

The licences are operated by ONE, (https://www.onebv.com). As part of a farm out and asset acquisition in March 2018, ONE acquired a 15% interest in the licence. In conjunction with the acquisition of Discover’s interest, operatorship of the licence was transferred from Discover to ONE. The acquisition is subject to approval by the Minister of Economic Affairs.

Licence Status

The initial exploration licences were awarded in September 2012 and ran for a period of 6 years. The exploration licences were amended and extended in June 2017 for a period to 31 December 2021 and include a firm well commitment, with the well to be spudded prior to 1 April 2019. Following the acquisition and processing of 965 km2 of 3D seismic the Kampen prospect is the preferred target for drilling the first well. 

The proximity of 4Quads to the potential developments in the GEms and H&L blocks means that synergies could exist between the areas with minimal impact to the nearshore environment. The potential scale of such a development makes the 4Quads of strategic importance to the Dutch economy.