Assets

The Netherlands

In November 2017 HALO acquired The Netherlands production, reserves and transportation/processing facilities of Tullow Oil Plc.

This transaction made HALO a producer of gas (& condensate) as well as being an equity participant in related mid-stream assets.

The Netherlands portfolio comprises interests in:

  • the Joint Development Area (JDA);
  • fields adjacent to the JDA;
  • the Northern Area;
  • the Western Gas Transport (WGT) pipeline and processing plant at Den Helder; and
  • the WGT Extension pipeline

The acreage under license spreads over approximately 2,800 sq. km and the assets generated average net production of 2,391 boepd in 2018.
The assets benefit from stable field production, long history, positive outlook and the Company sees potential for significant upside in proven undeveloped, probable reserves, contingent resources and prospective resources.
Gas produced from the Netherlands Assets trades in line with the Title Transfer Facility (“TTF”), a virtual trading point for natural gas in the Netherlands.

Figure 1

Joint Development Area

Table 1 - JDA Partners and working interest

The JDA system comprises 31 producing fields spanning 7 licence blocks and five processing platforms, of which three have compression facilities. Well head platforms and subsea completions are used to connect the wells to the processing platforms. Two different gas qualities are produced in the JDA area: HiCal and LoCal. LoCal Gas is mainly found in the K15 area and gathered on the K15-FB-1 platform and exported to Den Helder via the LoCal pipeline to the Local processing plant onshore. The WGT Extension and WGT pipeline transport HiCal gas to the Den Helder terminal onshore. The system provides a degree of security of supply: if a platform goes down, other platforms can continue to produce.

Details overview of JDA

L13-FI Development

The L13-FI field was discovered in 1988 by well L13-13. In 1992 a 3D seismic review was carried out by NAM based on 3D poststack depth migrated seismic, including L13-13 time-depth information.

The development drilling resulted in a reduction in gas in place in the field versus FDP expectations, with Base Case GIIP falling from 163.9 Bcf to 104.3 Bcf. Currently estimated base case recoverable reserves are 48.4-59.6 Bcf, depending on the actual structural situation away from the wells, as well as intra-field communication.

Development drilling of the L13-FI field was completed in 2018 and gas production began on 24th August 2018, and the field is currently producing at around 2.2 MMscf/d net to HALO.

K12

The K12-B9 field contains three fault blocks

  • North-East (wells K12-B9ST & K15-FG-106)
  • Central (well K12-B10, no production)
  • West (well K12-B11)

The field is operated by Neptune, apart from well K15-FG-106 which is NAM operated.

Three wells are producing through the Neptune operated K12-B platform and the Northern Gas Transport (NGT) pipeline to Uithuizen.

Well K15-FG-106 which is NAM operated produces through the NAM operated K15-FG platform with export via the WGT; of which HALO owns a participating interest.

During 2018, operators NAM and Neptune successfully negotiated a lifetime extension project for the JDA satellite fields K12-B and K12-B9. Production from these had originally been planned to be permanently shut down at the end of 2018, due to government regulation of emissions from the hub K12-BP platform. In the alternative scenario, modifications will be made during 2019 to allow local compression and wet gas export to the Neptune hub L10 platform. Production is expected to restart in 4Q 2019 and continue thereafter for a lengthy period.

K18-Golf

Through its interest in the JDA, the K15 license allows HALO to hold a 2.189% unitised interest in the cross-border K18-Golf field, operated by Wintershall. The most recent well, K18-G2, had led the operator to request additional capacity usage of the K15 facilities and 3D Seismic studies have improved interpretation of the internal reservoir character within the K18-Golf field.

A fourth development well has recently been agreed in the K18-Golf partnership, and is currently planned to spud in 2020.

Northern Area (E-Blocks)

E-18A

E-18A was discovered in 2006 and was developed in 2009. The E18-A field came onstream in July 2009 with the A1 well. Production from the A2 well commenced the following month, with the field reaching a peak production rate of approximately 2.3 MMscf/d in September 2009. The third development well, E18-A3, was brought onstream in January 2011. Due to disappointing reservoir performance, and the lack of a clear infill drilling target, the field was shut-in in September 2018.

The development wells have been abandoned, and the platform will be removed in June 2019. The topsides have been sold to the Wintershall Sillimanite development.

E18-A Unit partners

F16-E

The F16-E field was discovered in 2001, and was developed in 2004 with a total of five wells. Production peaked at 4 million Nm3 per day in 2007, but has subsequently declined to 200,000 Nm3/d, in spite of a recent compression upgrade. Infill opportunities and well renovation have been investigated, but have not been economic. At present, cessation of production is envisaged in 2020.

F16-E partners

Exploration & Appraisal

HALO’s exploration assets include 5 non-operated exploration licences in the E quadrant of the Dutch North Sea.

The Vincent well was drilled in January 2014, Block E-11. The well encountered a 130ft gas column and succeeded in proving the Carboniferous play.

In 2015, Neptune farmed in to the licences and assumed operatorship from HALO.

The E-Block JV gained access to a new 3D seismic survey which partially covers the Maple prospect. The JV completed technical work on the Triassic Maple exploration prospect in the E15c licence, and remaining Carboniferous prospectivity in the other E-Blocks.

The E15c partnership have jointly agreed to offer the Maple well to the Ministry and the partnership is currently planning to drill in 2020 (under a licence extension). On the Carboniferous prospectivity in licences E10, E11 and E14, the partnership concluded that whilst there were a significant number of prospects, no further work is proposed on the Carboniferous in 2019, unless the Partners refocused therein.

In 2018, the Partners withdrew from the E14 licence. However, Vincent may be reviewed for appraisal based on the results from Maple and any combined development plans.

Pipelines and Infrastructure

Western Gas Transmission (WGT) & WGT Extension

HALO owns equity in the Western Gas Transmission (WGT) system, a key gas evacuation system in the Netherlands.

HALO’s equity translates into capacity rights in the WGT System with no tariffs due for equity holders. Unused capacity is utilised for third party throughput; third party users pay operating costs plus commercial tariffs for access to the WGT.

The tariff income provides a significant income stream while there remains upside potential from tie-ins of nearby discoveries from other companies. WGT required no capital expenditure in 2018 and represented minimal operating costs for owners of the facilities.

HALO has a surplus capacity and would benefit from tariff income from new third party tariff contracts. There remains ullage in both pipelines to accommodate third party production.

WGT is ideally positioned to transport gas from new fields in the future, and the pipeline and Plant operators continue to look for new business opportunities.

Western Gas Transmission

Den Helder Plant

HALO also owns 8.88% of the Den Helder processing facilities which is the primary onshore point for receiving gas from the HiCal WGT system, JDA LoCal pipeline and NOGAT trunk-line.

The LoCal plant and pipeline is owned by the JDA and all costs associated with these are included in the JDA budget.

The HiCal plant operating costs are shared among the WGT (plus WGT-Extension) system users on a throughput basis.

There is the potential to upgrade LoCal system compressor as well as the possibility of combining the facilities with other, similar companies nearby to improve efficiency and reduce operating costs further.

HiCal plant

United Kingdom

The Greater Pegasus Structure (GPS), located on the northern margin of the UK Southern North Sea (SNS) gas basin, comprises separate gas charged segments, within a large, late Carboniferous anticlinal structure truncated by the Base Permian Unconformity (BPU).

It lies within the UKCS Blocks 43/13b, 43/14b, 43/17b, 43/18b, 43/19b and 43/12 (Licence P1724, P1727 and P2128) that are licensed by Spirit Energy (55% Operator) and HALO Offshore UK Ltd. (45%).

Four segments have been drilled to date and these have been found to be gas charged:

  • Pegasus West (43/13b-7),
  • Pegasus North (43/13b-6Z),
  • Pegasus East (43/13b-4) and
  • Browney (43/18-1)

The last major segment will be drilled in 2019 by the Andromeda North exploration well.

Andromeda Prospect

The Andromeda prospect is located on Block 43/12 approximately 7km west of the Pegasus West discovery well. The Andromeda structure is a large, seismically well-defined four-way dip closed Intra-Carboniferous anticline completely covered by 3D seismic that was reprocessed in 2017 to optimize imaging of the Greater Pegasus Area. The structure is divided into the Andromeda North, Andromeda Central and Andromeda South segments.

In the Most Likely Case (and Upside Cases), the Andromeda structure is connected to the Pegasus West structure making the prospect a combination of Appraisal and Exploration. Both the Operator and the Group assess the prospect as having a high Probability of Success (“PoS’).

Philippines

The Group (through its wholly owned subsidiary HALO BV) holds a 15% interest in Service Contract SC54A in the NW Palawan Basin, offshore Philippines. The project holds a number of undeveloped oil discoveries.

The license is currently suspended pending the lifting of a drilling moratorium in the West Philippine Sea and therefore HALO does not need to participate in any material capital expenditure programs. The suspension period ends on 4th August 2020, at which time the partners must elect to enter a new licence period or relinquish the licence.