Understanding of connectivity in Senegal key to tapping upside for Cairn

by Elaine Reynolds

When Cairn Energy started its four well appraisal of its SNE discovery in late 2015, the key objectives of the programme were to:

•   Establish the productivity of the reservoirs
•   Determine the reservoir continuity and connectivity
•   Reduce the resource range uncertainty

This week, the company provided details of the results of the appraisal campaign as part of its half yearly results. The successful programme boosted 2C resources by 43% from 330mmbbls pre campaign to 475mmbbls and established flowrates of between 5000bopd and 8000bopd across four separate DSTs in two wells.

Uncertainty still remains however, particularly around the connectivity of the upper reservoirs and investigating this further will be a priority for the next phase of drilling planned for late 2016/early 2017, when the company intends to drill two more appraisal wells, with multiple options for further wells. 

SNE schematic
Source:Cairn Energy

Good quality reservoir has consistently been found across SNE, though the lower reservoirs are described as being better quality than the upper reservoirs. The upper reservoirs are finer grained and slightly thinner and, during testing of this zone, a slight pressure depletion was seen indicating that connectivity is not as good here. Since a greater part of the gross volume is known to be in these upper reservoirs (though Cairn has not specified in what proportion), the next phase of appraisal will be designed to gain a greater understanding of the connectivity here. The upper reservoirs currently have a lower recovery factor (RF), so most upside is likely to come from improving the RF in these reservoirs. Key to this will be the ability to waterflood as many of the upper reservoir layers as possible. The upcoming appraisal will include interference testing to further understand connectivity and the likelihood of being able to achieve pressure support through waterflooding, and pressure gauges have already been installed in two of the four existing appraisal wells for this purpose. 


Cairn also provided an update to its resource range for SNE. Following the SNE-1 discovery well, the company estimated the 1C-2C-3C range to be 150-330-670 mmbbls. The most recent estimates have been independently prepared by ERC Equipoise and are now 274-473-906mmbbls. The uncertainty range has therefore increased post drilling, but with a shift to the upside. Looking at the change in STOIIP between the SNE-2 and SNE-4 appraisal wells, we can see that the 3C figure remains virtually unchanged, so that the increase in the upside estimate is driven by being able to increase the RF.

Company resource estimate post SNE-2
Source: Cairn Energy

ERC Equipoise resource estimate post SNE-4
Source: Cairn Energy

Cairn's estimate is more conservative than that of its SNE partner, FAR Limited. FAR's estimate of gross resources was independently assessed by RISC at 277mmbbls 1C, 561mmbbls 2C and 1071mmbbls 3C. We do not have sight of FAR's STOIIP figures, however we expect that the difference between these figures is most likely to be as a result of using a slightly higher recovery factor.