Jacky well judgement

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Jacky well judgement

Posted 04.07.2012 08:28:39 av John Bradbury

Canadian-based explorer North Sea Energy has lost a contested court case over paying equity costs of a North Sea well on the UK's Jacky field.

In the High Court in London North Sea Energy has been ordered to pay its 10% share of costs for the unsuccessful Jacky 03 well which was drilled last year and failed to produce any oil.

Craig Anderson, chief executive officer of North Sea Energy, slammed the decision by the presiding judge, Judge Popplewell, which was made in favour of Jacky field operator Ithaca Energy.

“The UK High Court’s Judge Popplewell has deemed that the J03 well was not an appraisal well but rather a producer according to the Joint Operating Agreement (JOA) regardless of the fact that it has never produced any oil,” NSE stated. And the company continues: “NSE opposed the drilling of the J03 well on the basis of its technical and economic merits.”

And Anderson added: “It’s a blow for minority joint-venture partner rights in the UK North Sea, and I am very disappointed by the Popplewell judgement.”

Nevertheless NSE states that it has paid all the costs associated with drilling the J03 well, and the company's only remaining cost related to this judgement are Ithaca Energy’s legal fees – which are estimated at more than £500,000.

In a separate statement today Ithaca said the Popplewell decision has backed its view of the issues: “The Court has confirmed Ithaca's position in concluding that the Jacky J03 well was drilled as a "Joint Operation" under the joint operating agreement. Accordingly, NSE remains obliged to contribute to the Jacky J03 well costs in accordance with its field equity (10%).

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