Page 15 - LatAmOil Week 13 2020

LatAmOil
NEWS IN BRIEF
LatAmOil
This is the first deep water OBN survey in Mex- ico following the 2013 Energy Reform, and Mag- seis Fairfield is excited to leverage its extensive deep water OBN experience gained in the US sector of the Gulf.
Magseis Fairfield, March 27 2020
Mexico: McDermott
awarded contract by BHP
for Trion FPU pre-FEED
design competition
McDermott International has been awarded a sizeable contract by BHP Billiton Petroleo Operaciones de Mexico to provide pre-front- end engineering design (pre-FEED) services for a floating production unit (FPU) that will be installed in a water depth of approximately 8,200 feet (2,500 metres) at the Trion field, located approximately 19 miles (30 km) south of the U.S./Mexico border and approximately 112 miles (180 km) from the Mexican coastline.
The pre-FEED scope includes engineering tasks related to the configuration, sizing and pre- liminary analysis of the FPU, including topsides, hull, risers and mooring.
McDermott will work in partnership with Houston Offshore Engineering (HOE) and Wood on the pre-FEED, with McDermott’s Houston office leading engineering services (supported by its Mexico City office) and HOE and Wood providing engineering for the hull and topsides, respectively. McDermott will per- form project management, execution planning and estimation services. Installation studies will be performed by McDermott’s Marine Opera- tions and technical support for fabrication and integration planning will be handled by McDer- mott’s Mexico-based Altamira Fabrication Yard.
The project will begin immediately with com- pletion projected in the third quarter of 2020. The contract award will be reflected in McDer- mott’s first quarter 2020 backlog.
McDermott International, March 31 2020
INVESTMENT
Petrobras announces start of binding phase for sale of Merluza and Lagosta fields in Santos Basin
Petrobras, following up on the release dated Feb- ruary 27, 2020, has announced the beginning of the binding phase referring to the sale of all its
equity interest in the Merluza and Lagosta fields, located in the shallow waters of the Santos Basin. Qualified parties for this phase will receive a process letter with detailed instructions on the divestment process, including guidelines for due
diligence and submission of binding proposals. Operating since 1993, the Merluza fixed plat- form (PMLZ-1), located in a 135-metre water depth, is the oldest in operation in the San- tos Basin and was installed for the production of natural gas and condensate from the field. Since April 2009, the offshore unit has also been responsible for the production of natural gas and condensate from the Lagosta field. The average production of the fields, in 2019, was 3.6 thou-
sand barrels of oil equivalent per day (boepd). Petrobras is the exclusive concessionaire of
both concessions.
The teaser, which includes key information
about the opportunity, as well as the eligibility criteria for selection of potential participants, is available on the Petrobras website.
Petrobras, April 01 2020
PERFORMANCE
Trinidad: Touchstone
Exploration announces
Q4-2019 results
Touchstone Exploration has reported its oper- ating and financial results for the three months and year ended December 31, 2019. Unless oth- erwise stated, all financial amounts herein are rounded to thousands of US dollars.
Subsequent to year-end, we issued 22.5mn common shares raising net proceeds of approx- imately $10.8mn to primarily fund the Chinook prospect on our Ortoire block.
Our emphasis remains on bringing Coho-1 and Cascadura-1ST1 onto production as soon as possible.
We are preparing to drill an earning explora- tion well at the Chinook prospect and anticipate continuing with the planned exploration pro- gramme unless it becomes absolutely necessary to suspend it.
Touchstone has immediately responded to the significant global economic uncertainty created by the novel coronavirus (COVID-19) pandemic combined with the unprecedented decline in crude oil prices. Discretionary costs have been minimised with field operations lim- ited to emergency workovers.
Management’s main concern is the safety and wellbeing of its employees and stakehold- ers. International travel has been restricted, and remote working and physical distancing meas- ures have been implemented where possible to
allow our operations to continue as smoothly as possible in the circumstances.
Aside from voluntarily restricting certain field operations, the Company has had no oper- ational impacts from COVID-19 to date, and we will monitor the situation and adapt our opera- tions accordingly.
Our low base production decline rate, strong operating netbacks, top-tier capital efficiencies, lack of development drilling commitments and solely operated exploration capital programme provide flexibility in this volatile market. Bol- stered by the recent private placement, the Company had approximately $13.5mn of cash as at February 29, 2020, and no repayments are required on the Company’s debt until January 2021. We remain focused on managing our operations to ensure that we operate within our credit facility financial covenants.
2019 Highlights: achieved annual crude oil sales of 1,825 barrels per day (bpd), a 6% increase relative to the 1,718 bpd produced in 2018; exe- cuted a $10.113mn exploration programme to drill two gross (1.6 net) successful wells; increased petroleum sales by 2% from the prior year, generating $38.654mn versus $37.729mn in 2018; despite an annual 10% decrease in Brent reference pricing, we realised an operating net- back of $26.61 per barrel in 2019, consistent with the $26.68 per barrel generated in the prior year; reduced operating costs by 8% and 14% on an absolute and per barrel basis from the prior year respectively; despite a 90% annual decrease in discretionary development capital invest- ment, we delivered funds flow from operations of $6,840,000 ($0.04 per share) compared to $8,548,000 ($0.07 per share) realised in 2018; exited the year with cash of $6,182,000 and net debt of $16,503,000, representing 2.4 times net debt to annual funds flow from operations.
Operating Results: Throughout 2019, Touch- stone conducted minimal capital development activity and continued to allocate capital to exploration activities on our Ortoire property. As a result, crude oil production during the fourth quarter averaged 1,690 bpd, a 9% decrease rel- ative to the 1,851 bpd produced in the fourth quarter of 2018, as incremental production achieved from wells drilled in 2018 were offset by natural declines. 2019 crude oil production averaged 1,825 bpd, representing an increase of 6% from production delivered in 2018. We invested $1.388mn in development activities in 2019, which mainly consisted of recompletion activities on legacy wellbores.
We commenced our onshore exploration programme on the Ortoire block (80% working interest) in the second half of 2019, drilling two gross exploration wells (1.6 net). Coho-1, the first natural gas prospect, had an encouraging production test that exceeded the Company’s expectations.
Week 13 02•April•2020
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