Page 18 - LatAmOil Week 23 2020

LatAmOil NEWS IN BRIEF LatAmOil

From November 1, 2019, to December 31, 2019, actions taken during the crisis to return produc-
a total of 152,819 boe (consisting of 34,466 bar- tion to the Exploration and Production area and
rels of oil and 710.1mn cubic feet of gas) net to to readjust refining loads by focusing on prod-
Echo was successfully produced from Santa ucts that maximise the company’s margin with-
Cruz Sur, at an average rate of a net 2,505 boepd. out putting pressure on inventories.
Production continued during Q1-2020 at an Petrobras, June 05 2020
average net rate of 2,394 boepd.
The Company is pleased to confirm the Canacol Energy provides
identification of an initial portfolio of 16 low
cost workover and intervention operations at May gas sales update
Santa Cruz Sur focussed on 1P proven devel-
oped non-producing (PDNP) and 2P reserve Canacol Energy is pleased to provide the fol-
intervals, with the intention of bringing those lowing gas sales and operations update. The gas
volumes into production and, therefore, migrat- sales should be read in conjunction with the
ing the associated volumes to proven developed Corporation’s outlook section contained in its
producing (PDP) reserves. The cost of workover potential assumes a realised sales price of US first quarter press release and MD&A released
potentials identified is low, as compared to the $32 per barrel and a gas price of $3.5 per million on May 13, 2020.
cost of a new well, and given that the workovers BTU. The remaining twelve opportunities in the Current indications, as evidenced by the lat-
sit in the developed part of the field, they are initial portfolio could each be capable of increas- ter half of May, shows earlier than anticipated
straightforward to bring online. ing gross production by up to 600,000 cubic feet interruptible demand returning to Canacol’s gas
This initial portfolio of opportunities is part per day and 91 bpd. The Company continues deliveries and nominations as economic activity
of a wider portfolio of Santa Cruz Sur work- efforts to identify and mature further produc- recommenced following general quarantine.
over and interventions, which includes fur- tion enhancement opportunities over and above The national quarantine on all economic
ther opportunities to increase production and the 16 already assessed to provide further growth activities was lifted effective June 1, with the
reserves, currently being assessed by the Santa and value to shareholders. exception of the cities of Bogota, Cali, and
Cruz Sur partners. CEO Martin Hull commented: “The addition Cartagena, where only manufacturing and con-
The Company previously announced that of the important work in maturing the produc- struction activities are currently allowed. It is
the Eagle workover rig, owned by Echo and its tion enhancement opportunities reconfirms the anticipated that quarantine will be lifted in those
partners in the Santa Cruz Sur assets, had been flexibility and range of well-balanced risk-re- cities on June 15.
redeployed from Campo Limite to commence a ward upside options contained within the Santa Realised contractual gas sales: May 1-14,
standard programme of well interventions and Cruz Sur portfolio. In addition to the existing 130mn cubic feet (3.68mn cubic metres) per day;
maintenance and that the first well intervention revenue generating producing proved reserves, May 15-31, 181mcf (5.126 mcm) per day, May
being undertaken, in the Chorillos block, was the combination of PDNP 1P and 2P production monthly average 158mcf (4.474 mcm) per day,
assessing the production potential of bringing enhancement opportunities with exploration April monthly average, 136 mcf (3.851 mcm)
a historical well back online in a small field at upside provides a diversified portfolio in a single per day.
Santa Cruz Sur. The Company confirmed that set of assets at Santa Cruz Sur.” In addition to the realised contractual gas
the expected new production potential of the Echo Energy, June 08 2020 sales above (which are essentially gas produced,
currently non-producing well was estimated at delivered and paid for) the Corporation saw an
41 bpd when brought into production, follow- Petrobras reports record additional 12 mcf (340,000 cubic metres) per day
ing a swab test that produced a cumulative 280 of gas sales nominations throughout the entire
barrels of oil over 48-hour period. This success- high fuel oil exports in May month of May (also similar to April’s 14 mcf
ful workover operation earlier this year provides per day, or 396,000 cubic metres per day) which
confidence in pursuing further opportunities in Petrobras reports that it exported 1.11mn tonnes must be paid for during the remainder of 2020
the workover portfolio to increase production. of fuel oil in May, surpassing the previous record for which delivery timing is at the discretion of
Echo is now pleased to confirm that in addi- set in February 2020 by 10%. The amount of fuel the off-taker, as outlined in the May 13, 2020
tion to the successful operation described above, oil exported was 231% higher than the volume press release.
an initial portfolio of 16 workovers, focused on exported in May of last year. With current hydroelectric reservoirs at a
seeking to bring PDNP & 2P reserves intervals It is important to highlight that, on January historical low 33% related to an unusually dry
into production, has now been matured. Of this 1, 2020, the new global specification for marine winter, the demand for gas in the use of thermo-
portfolio of potential projects, four initial oppor- fuels (IMO 2020) came into force, which reduced electric power plants remains high and above
tunities (consisting of three well workovers to the limit of the sulphur content in fuel oil from historic averages. Low reservoir conditions are
bring associated PDNP 1P reserves into pro- 3.5% to 0.5%, which has generated a unique anticipated to last throughout the remainder of
duction and one project targeting 2P reserves) opportunity for Petrobras, which produces the year.
are estimated to be capable of adding expected crude oil and fuel oil with low sulphur content. While we are currently experiencing encour-
combined additional production of up to 4.8 The record in exports occurs in a challeng- aging trends as interruptible volumes begin to
mcf per day of gas and 84 bpd (total combined ing period of the world economy with reduced normalise, the company cautions that future nat-
additional production potential of 884 boepd). global demand for oil and oil products caused ural gas demands could be volatile and maintain
These 4 initial opportunities offer a combined by the COVID-19 pandemic. The strategy of that the guidance range in place continues to be
estimated value of approximately $9mn in diversifying the destinations of fuel oil exports appropriate.
NPV10 uplift based on an aggregate gross cost has proved effective in capturing greater partici- The Pioneer 53 drilling rig was reactivated on
of approximately $1mn and fast payback peri- pation in the foreign market. May 24, 2020, having been inactive since March
ods of between two to six months. This uplift The record achieved reflects the result of 26, 2020, due to the national quarantine.

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