Independent Parkmead is considering drilling a prospect called Davaar that lies close to the deepwater Foinaven field operated by BP west of Shetland.

Research by analyst Charles Stanley Securities points out that Parkmead’s recently-announced US $66 million fundraising exercise is likely to be used to drill the prospect in the frontier UK sector. Davaar has a pre-drill estimate of 186 MM bbl of recoverable oil reserves, “...making it the largest potential resources in Parkmead’s exploration portfolio,” the analyst says, adding that if successfully drilled, Parkmead’s interest in the prospect would be valued at $520 million.

Davaar lies in license P2069 covering block 205/12 and was acquired by Parkmead in the UK’s 27th licensing round. The independent is the operator with a 30% stake, with its partners being Atlantic Petroleum (30%), Dyas (14%) and Summit Petroleum (26%).

Work obligations include reprocessing 551 km of 3-D seismic data to provide AVO (amplitude versus offset) and inversion data volumes. The license has a traditional 4-year term, with Parkmead and its partners obligated to drill one well to 3,250 m (10,660 ft) total vertical depth subsea or at least 50 m (164 ft) into Shetland Group rocks.

Davaar lies 100 km (62 miles) west of Shetland in about 500 m (1,640 ft) of water. Foinaven is the closest producing field – and therefore could be the closes development route, unless a standalone solution is preferred. Drilling is forecast for 2015.

Charles Stanley goes on to point out that there is the facility to export oil via shuttle tankers, and there is already gas infrastructure, the pipeline connecting Foinaven and the Schiehallion fields to the Sullom Voe terminal on the Shetland Islands.

Also, under the UK’s current tax regime, if Davaar is successfully drilled it would be taxed at 62%, including the 32% supplementary charge introduced a few years ago. However, because it lies in relatively shallow water it will not benefit from the £3 billion west of Shetland tax allowance aimed at providing relief for deepwater fields there.

“Based on our analysis of the BP-operated Foinaven field, we expect that a successfully discovery at Davaar will be developed with 16 wells (12 producers and four water injectors)” the analyst suggests. And it goes on to propose that drilling would require a semisubmersible and that net drilling costs would be £257 million, with Parkmead’s share of development costs estimated at up to £994 million.