Cairn Calls 6th Senegal Well a 'Success'

UK-based Cairn Energy said that its latest offshore Senegal appraisal well, SNE-4, yielded “multiple samples of gas, oil and water recovered to the surface”. The latest success, however, may be bittersweet for partner ConocoPhillips as it considers global assets for divestment.

Cairn CEO Simon Thomson said May 19 that Cairn had “drilled four successful appraisal wells in Senegal and we are delighted with the results to date” calling it a “world-class asset.” SNE-4 was Cairn’s sixth well offshore Senegal and the fourth this year. The company said a gross oil column of about 100 m was encountered, similar to its earlier SNE-1, SNE-2, SNE-3 and BEL-1 wells. Signs are that 32° API oil is present across the SNE field.

The latest well confirmed the extension of reservoirs more than 5 km to the east and down-dip of a previous well, SNE-3. It also confirmed oil-bearing Upper Reservoir sands of similar quality to those encountered as gas-bearing elsewhere in the field.

Uppermost gas sands first encountered in SNE-3 and BEL-1 were also present and gas-bearing in SNE-4, added Cairn.

SNE-4 well, drilled in 942 m water depth some 85 km offshore in the Sangomar Offshore block, is now being plugged. Ocean Rig Athena which drilled the recent wells will now move on to other work, while Cairn (40%) and partners ConocoPhillips (35%), Australian independent FAR (15%) and state Petrosen (10%) will continue interpreting results.

Cairn said May 12 it plans to announce further Senegal resource revisions in August.

Success offshore Senegal has fueled speculation that Conoco, which reported a $1.5bn net loss in 1Q 2016, might divest its 35% Senegal stake. The US major has said it was looking to make divestments generally to bolster its balance sheet.

Asked on an April 28 call to analysts if it would sell up in Senegal, Conoco CEO Ryan Lane replied: “We are just not going to fire-sell anything and we are prepared to continue to appraise and develop if we need to… We still have our deepwater portfolio in pieces on the market as well. So we are still trying to progress that. But again, we know what our hold value is and we know what value it would take to sell the assets.”

Mark Smedley