So what are the problems at Horse Hill?

So what are the problems at Horse Hill?

Horse Hill-1 was drilled as a slightly deviated well. This means that it is more of less vertical when it goes through the reservoir sections. That, in turn means that the length of well passing through the oil column is limited. So the amount of oil that can flow into the well is restricted to that surrounding a few tens of metres of borehole.

Horse Hill-2Z was drilled as a horizontal well to significantly increase the field’s production potential. By horizontal well we mean that the well was drilled vertically near the surface then deviated when it reached the Portland reservoir to run more or less horizontally through the reservoir. This means that the well bore is in contact with hundreds, rather than tens of metres, of oil bearing rock. If it were that simple then production rates from the well would be much higher – probably around 1,000+ bbls/day of oil. Unfortunately for UKOG, they are saying that the horizontal well has encountered a couple of zones where natural fractures are allowing water from below the oil-water contact to be sucked in when the well is put on production. These fractures are probably caused by small geological faults that they may have been able to see had they invested in acquiring 3D seismic data, but are probably below the resolution of the historic and limited 2D seismic data set that they persist in using. As an aside, a more established and reputable oil and gas operator would have obtained up to date and more considerably more sophisticated 3D seismic data before embarking on such an undertaking.

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We will attempt to explain what is happening but do skip the next paragraph if you don’t want Reservoir Engineering 101.

The rate at which oil flows from a well depends on a variety of factors. Most important are the porosity and permeability of the reservoir rock:

Porosity is the volume of space between the grains of solid rock, that is able to contain the oil. It is  expressed as a percentage of the total volume of rock. We are probably looking at between 10% and 20% of the Portland sandstone rock being oil filled void. Just think in terms of a bowl of marbles – the porosity is the space between the marbles.

Permeability is the way in which the porosity aligns. If the spaces between rock grains are well aligned then fluids can flow easily through rock volume. 

Fluids will flow preferentially through high porosity, high permeability volumes of rock. Normally the preferential streaks will align with the beds of rock, so they will be nearly horizontal at Horse Hill. What appears to have happened at Horse Hill is that HH-2z has encountered high porosity, high permeability natural fractures that are aligned nearly vertically. This means that when the well is produced fluids are flowing preferentially up the vertical fracture system. Since the column of oil is only a few 10s of metres thick in a vertical sense the well is sucking in water from below the oil column. UKOG is now trying to isolate the water producing zone by plugging the perforations it has made in the steel casing, but it is clearly having major problems doing this.

We don’t know enough about reservoir engineering to say if they are looking at a major disaster, or just an expensive short term problem, but it is bad news for them whichever way you look – impaired cash flow, additional expense and damaged reputation.

If you want to read more geophysics and analysis of UKOG’s approach to drilling the Weald, you can find an alternative view at Professor Smyth’s blog that was written back in 2017, but still appears to us to be quite prescient.

Waverley Against Drilling