North Sea offshore fracking plans outlined by Trapoil
28 March 2013 Last updated at 11:11
Trapoil outlines North Sea fracking plans
A small oil drilling firm has announced its intention to develop offshore fracking in the central North Sea.
Trapoil is working up plans that would extend the technology from its extensive use onshore in North America.
It claimed there could be more oil and gas from unconventional technology than all of the output so far produced from the North Sea.
Trapoil plans test drilling a well next year, if it can find a partner for the project.
The company said the well could be “game-changing”, if it could prove that oil will flow out of tight reservoirs at a commercial rate.
The fracking process involves using high-pressure liquid to fracture shale rock in order to release oil and gas.
In a statement accompanying its annual results, Trapoil said: “The amount of oil potentially held in tight reservoirs is equal to, or probably greater than, all of the oil produced to date from the UK North Sea.
“The possible prize is therefore substantial, but this asset is still very much in its infancy and we will need to perform a considerable amount of work before drilling may occur.”
The cost of “proof of concept” test drilling, targeted for 2014 and in partnership with Extract, is too expensive for a smaller drilling firm, so they would have to find a larger partner.
That reflects annual results for the London-based firm that are downbeat about the financial constraints smaller operators are facing.
It made a pre-tax loss of £10.8m last year. With its Athena field coming on stream last year, it had revenue of less than £2m, though that is expected to increase significantly during this year.
Trapoil had two discoveries last year, but recently announced its Magnolia prospect had been unsuccessful.
Finance director David Kemp said: “There is a dichotomy in and around Aberdeen. The service sector is doing very very well, but exploration has been quite disappointing for a couple of years, so it’s been a struggle for small cap firms to attract funding”.
Trapoil has secured a funding deal with GE Capital. Mr Kemp said it was not looking to be acquired as a means of releasing funds.