Lauded North Sea oil reserve area under review

LONDON, Aug. 19 (UPI) -- After boasting of the potential in the northern waters of the North Sea, a British energy company reported mixed results from an appraisal well.

Independent Oil and Gas announced Friday it completed the drilling of its first appraisal well in the Skipper oil reservoir in the northern waters of the North Sea. The company said it retrieved good core samples, which are on their way to the Scottish mainland for testing, but failed in a secondary objective targeting areas below the formation.

"Whilst the exploration prospects did not encounter hydrocarbons, I am increasingly confident that the commerciality of the Skipper field has been confirmed now that we have the data we need to progress to the field development planning," CEO Mark Routh said in a statement.

The appraisal well is the first ever operated by the company, which said early indications are that Skipper is a better prospect than initially expected.

The British referendum in June to leave the European Union cast a shadow over future investments in the North Sea, already beat down by field maturation. Nevertheless, the Norwegian government this week reported total oil production offshore in July was 18 percent higher than June, 10 percent higher year-on-year and 9 percent above what it expected.

Earlier this week, Independent Oil and Gas said testing results may show the oil found in the Skipper well was of a characteristic that would require fewer wells to produce than previously thought, which may influence the baseline development costs.

The company said data so far was significant and put it on the path toward securing 100 million barrels of oil equivalent for future development.