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United Oil & Gas announces

ASD-1X well test update

AIM-listed United Oil & Gas has provided an
update on the testing of the ASD-1X exploration
well in the Abu Sennan concession, onshore
Egypt and the spudding of the AJ-8 development
well. United holds a 22% non-operating interest
in Abu Sennan, which is operated by Kuwait
Energy Egypt (KEE).
Highlights: Notice of a commercial discovery
and an application for a development lease cov- Under the project’s new tolling structure, and also operating an FSO; The Omni FSO pro-
ering the ASD-1X discovery have been submit- current shareholders in the Alen field, which posal could reduce VAALCO’s operating costs by
ted to EGPC by the operator, KEE. The ASD-1X comprises offshore Blocks O and I, will be able 15% to 25% when compared to the current FPSO
well tested both the Lower Bahariya and Abu to directly lift LNG in proportion to their per- contract during the term of the proposed agree-
Roash C (ARC) reservoirs. centage ownership, drawing new entrants to the ment; Maintaining the current FPSO beyond its
Preliminary short-term test results from the market and increased LNG revenues. In turn, current contract or transitioning to a different
Lower Bahariya reservoir indicate: a maximum Shell will no longer serve as the sole off-taker of FPSO would require substantial capital costs;
flow rate of 1,619 bpd and 2.840 mcf/d (circa LNG cargoes in Equatorial Guinea, which it had Estimated capital investment of $40-50mn gross
2,187 boepd gross; 481 boepd net) on a 64/64” been since 2015. ($25-32mn net to VAALCO) for deployment of
choke; a rate of 852 bpd and 1.600 mcf/d (circa “Under the existing merchant structure the Omni FSO and the required field reconfigu-
1,172 boepd gross; 258 boepd net) on a more for the Equatorial LNG plant, Shell has had a ration, with approximately 20% invested in the
constrained 32/64” choke. monopoly on the entire LNG volumes lifted second half of 2021 and the balance in 2022 with
Preliminary short-term test results from the from the facility via its acquisition of BG Group an expected payback of less than three years;
Abu Roash C (ARC) reservoir indicate: a max- back in 2015, which included its merchant LNG In the new field configuration, the FSO would
imum flow rate of 1,215 bpd and 1.371 mcf/d contract with the West African LNG plant,” says store and offload the production and processing
(circa 1,489 boepd gross; 328 boepd net) on a Olumide Ajayi, LNG analyst at ICIS. “The tolling would be completed on the existing platforms.
64/64” choke; a rate of 661 bpd and 0.632 mcf/d structure allows the current shareholders of the Currently forecasting that VAALCO’s capi-
(circa 787 boepd gross; 173 boepd net) on a more Alen field to directly lift the LNG produced in tal costs for the FSO and field reconfiguration,
constrained 24/64” choke. proportion to their percentage ownership on a as well as its planned 2021/2022 drilling pro-
Headline test results from both reservoirs free-on-board basis.” gramme, can be funded with cash from opera-
exceed United’s internal pre-drill expectations. Current shareholders in the Alen field devel- tions and cash on hand.
The EDC-50 rig has now moved to the Al Jahraa opment include Noble Energy (45% Block O, VAALCO and Omni, having agreed to an
Field within the Abu Sennan licence, where drill- 38% Block I), Glencore (25% Block O, 23.75% exclusivity period through June 1, 2021, will
ing of the AJ-8 development well commenced on Block I), state-owned GEPetrol (30% Block O, engage in further discussions with the intent to
May 2. 5% Block I) Atlas Oranto (27.55% Block I) and finalise a definitive agreement.
United Oil & Gas, May 04 2021 Gunvor (5.7% Block I). Utilising LNG tanker George Maxwell, CEO and Director, com-
Flex Artemis, Chevron lifted the first cargo from mented: “Sustained operational excellence and
the Alen project on March 10. robust financial performance at Etame serves as
LNG Africa Oil & Power, April 29 2021 the foundation for growing VAALCO through
organic drilling and future accretive acquisi-
Alen backfill project paves SERVICES tion opportunities in line with our strategy.
This development approach could allow us to
way for new LNG players in VAALCO announces letter enhance our operations, reduce costs, improve
net-backs and secure our ability to maintain
Equatorial Guinea production growth and maximise value at Etame
for the next decade. We will continue working
New players are expected to lift liquefied natural of intent for FSO at Etame to finalise an agreement with Omni that will be
gas (LNG) cargoes in Equatorial Guinea, follow- VAALCO Energy today announced that it has mutually beneficial for all parties. We remain
ing the flow of first gas from the country’s flag- signed a non-binding letter of intent (LoI) with focused on sustainable growth that provides
ship Alen backfill project in February. Omni Offshore Terminals to provide and oper- benefits to all stakeholders, enhances margins
Operated by Noble Energy EG, a Chevron ate a Floating Storage and Offloading (FSO) and provides strong investor returns.”
subsidiary, the Alen gas monetisation project unit at VAALCO’s Etame Marin field offshore VAALCO has studied a variety of alterna-
transports gas from the Chevron-operated Alen Gabon for up to 11 years upon the expiration tives regarding the expiration of the contract on
field to onshore gas-processing facilities at Punta of the current Floating Production, Storage and its current FPSO in September 2022. The pro-
Europa for the production of LNG, LPG and gas Off-loading (FPSO) contract with BW Offshore posed development approach utilising an FSO
condensate, in a bid to offset declining output in September 2022. and processing on existing platforms aligns with
from the Alba field and associated LNG export Key Highlights: Omni has provided VAALCO’s ongoing strategy to reduce operating
plant. VAALCO with a preliminary proposal for leasing costs and extend field life.

P14 www. NEWSBASE .com Week 18 05•May•2021