Page 9 - AfrOil Week 42 2019

AfrOil
NEWS IN BRIEF
AfrOil
UPSTREAM
VAALCO Energy confirms oil
discovery with Etame 9P
appraisal wellbore
VAALCO Energy today announced that the Etame 9P appraisal wellbore, targeting the sub- cropping Dentale reservoir beneath the VAAL- CO-operated Etame field offshore Gabon, was successfully drilled to a total depth of 10,260 feet (3,127 metres) and encountered both Gamba and Dentale oil sands. Operations are underway to plug back to a shallower depth and drill the Etame 9H horizontal development well section in the Gamba reservior.
Key highlights: verifies the presence of a Dentale oil column first identified in the Etame 4V well drilled in 2001; encountered approxi- mately 35 feet of good-quality Dentale oil sands with 27% porosity and 3,000 mD of permeabil- ity; VAALCO estimates gross recoverable oil resources of 2.5-10.5mn barrels of oil present in subcropping Dentale reservoirs; identified an oil column which was thicker than expected in the Gamba reservoir, which may result in higher ultimate oil recovery from the planned Etame 9H and Etame 11H wells than previously expected; VAALCO did not encounter H2S in either the Gamba or Dentale reservoirs; oper- ations are underway to retrieve drill pipe and tools that became lodged in the wellbore after reaching total depth, which will delay comple- tion of the Etame 9H into December.
CEO Cary Bounds commented: “We are excited that our first appraisal wellbore in the 2019/2020 drilling campaign has confirmed our estimates of meaningful recoverable resources in the subcropping Dentale, which we currently have classified as prospective. The successful Etame 9P is the first of many appraisal oppor- tunities that we have identified that have the potential to create substantial organic value for our shareholders. The result reaffirms the upside potential yet to be exploited from the Etame field.
“We continue to assess the viability of drilling future Dentale development wells as we aim to extend the overall life of the field by continuing to add reserves and production. We are now focused on drilling the Etame 9H development well which, if successful, could result in addi- tional production volumes coming online in December. VAALCO remains focused on deliv- ering value through operational execution, and we are hopeful that this is just the first of many positive steps toward our goal of organic produc- tionandreservegrowth.”
VAALCO, founded in 1985, is a Hou- ston-based, independent energy company with production, development and exploration assets
in the West African region.
The company is an established operator
within the region, holding a 31.1% working interest in the Etame Marin Block, located off- shore Gabon, which to date has produced over 110mn barrels of crude oil and of which the company is the operator.
VAALCO Energy, October 17 2019
Otakikpo Update: Phase
Two development project
sanctioned and marginal
field licence renewed
LEKOIL, the Africa-focused oil and gas explo- ration, development and production company, is pleased to announce that the Otakikpo joint venture between Green Energy International Ltd (GEIL) and LEKOIL (with LEKOIL as Tech- nical Partner) has sanctioned Phase Two of the Otakikpo field development plan (as described below), following the successful completion of an independent third-party competent persons report (CPR), and technical and environmental, social, health and safety (ESHS) due diligence, commissioned and undertaken by Standard Chartered Bank.
Following the project sanction, the JV is now finalising heads of terms with Anchor engineer- ing, procurement, construction and commis- sioning vendors for cost and schedule certainty to allow Standard Chartered Bank to close pro- ject financing as well as complete preparation for project execution.
The Joint Venture has also renewed the Otakikpo Marginal Field license for 20 years, following the payment to the Department of
Petroleum Resources (DPR) the sum of $1mn for the licence renewal fee ($400,000 net to LEKOIL).
After evaluating the existing infrastructure at Otakikpo, Schlumberger, in its role as non-finan- cial, technical partner has assessed the capacity of the infrastructure to be capable of producing 10,000 bpd (4,000 bpd net to LEKOIL Nigeria) and, with some debottlenecking, up to 12,000 bpd gross (4,800 bpd net to LEKOIL Nige- ria). Subject to closing of, inter alia, the project financing, the joint venture expects the first two wells of the phased development plan to bring production up to this level. The joint venture anticipates adding this incremental production by year-end 2020.
As announced on July 1, 2019, the joint ven- ture signed a non-binding Memorandum of Understanding (MoU) with Schlumberger and a trading subsidiary of a major international oil company that has been operating in Nigeria for more than half a century. The MoU covers a comprehensive infrastructure sharing and drill- ing programme around a group of marginal field assets in OML 11. Under the terms of the MOU, the major oil company will provide funding to the JV alongside the other funding partners, subject to completion of due diligence (which is ongoing), entry into definitive documentation and final investment decision. The joint venture will seek to enter into an exclusive off-take agree- ment with the major oil company for the sale of crude produced pursuant to this project.
The consortium of GEIL, LEKOIL and Schlumberger will form a multidisciplinary pro- ject management team in which Schlumberger will act solely as a technical partner to provide oilfield services and project management ser- vices to assist in ramping up production and long-term field management.
Week 42 23•October•2019
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