WATCHING THE WORLD DANISH OIL FLOW RISES

Back in 1966, Dansk Undergrund Consortium provided the first indication there might be oil in the North Sea with discovery of Anne field off Denmark.

Anne was the harbinger of strikes in the Norwegian and U.K. North Sea that led to establishment of that region as one of the world's prime offshore plays.

For 25 years the tiny chalk structure of Anne, since renamed Kraka, was left undeveloped while larger reservoirs were placed on production and the DUC combine of A.P. Moller, Royal Dutch/Shell Group, and Texaco Inc. puzzled over ways to make the field a commercial proposition.

KRAKA START-UP

Kraka production began last month, thanks to the latest low cost development techniques and DUC's growing expertise in drilling horizontal wells.

Kraka is producing about 4,000 b/d through a monotower wellhead platform tied back to DUC's Dan field through a 5 1/2 mile, 10 in. pipeline.

Several years ago, any increase in Danish production appeared to hinge on fields being found outside mature areas that have been producing since the early 1970s. The advent of horizontal drilling in difficult chalk reservoirs changed that outlook.

DUC has become one of the world's most experienced companies in drilling horizontal wells in thin chalk zones with poor reservoir characteristics.

Horizontal wells have enabled DUC to boost recovery in mature Dan field to 10-12% from 5-8%. The combine hopes a similar recovery rate will be possible in Kraka, which has only 12.6 million bbl in place, even though it has even less attractive reservoir characteristics.

DUC is drilling seven horizontal wells in Dan field and has recently submitted a 4 billion krone ($628 million) plan to the Ministry of Energy to drill 25 more wells in the field. A new wellhead platform will be needed to accommodate the wells, as well as a new flare tower.

The drilling program will put increased emphasis on horizontal wells and water injection to boost Dan production to 50,000 b/d from about 30,000 b/d.

Eighteen of the additional wells will be horizontal and will include for the first time four horizontal water injectors. DUC also will convert 14 conventional producing wells to water injectors.

The four horizontal water injectors will be drilled alongside horizontal producing wells so the water drive has a direct effect on hydraulically induced, sand packed fractures in the nearby producing wells.

MORE ON THE WAY

Denmark is still a minor player in the North Sea compared with Britain and Norway. In regional terms the 4,000 b/d from Kraka is very small. However, the new oil flow has helped hike Danish offshore production to a high of 135,000 b/d from about 110,000 b/d at this time last year.

Production is scheduled to go higher as Dagmar field goes on stream and Dan field flow rises. Liquids production also will get a boost from increased condensate resulting from higher gas production.

By yearend production could be nearly 150,000 b/d.