Decklar Resources Inc. Announces Update to Oza-1 Well Re-Entry
27 May 2021 - 10:00PM
Decklar Resources Inc. (DKL-TSX Venture)
(
the “Company” or “Decklar”) is pleased to
announce an update to operations at the Oza-1 well re-entry at the
Oza Oil Field in Nigeria through the Company’s wholly-owned
Nigeria-based subsidiary, Decklar Petroleum Limited.
Oza-1 Re-entry
Decklar continues to make considerable progress
on the Oza-1 well re-entry with the camp and all associated
infrastructure fully installed and operational. The major
components of the drilling rig equipment are being transported to
the field this week and it is anticipated the rig will be
completely moved, installed and rigged-up within two weeks. Decklar
will then commence the Oza-1 well re-entry operational activities
including the initial work of pulling out the existing tubing,
running a cement bond log and cased hole reservoir logs. The
re-entry activities will then include the testing of three oil
bearing zones (L2.2, L2.4 and L2.6) independently and then it is
anticipated that a final dual-tubing string completion will be
installed and the L2.2 and L2.6 zones placed into production upon
successful testing. The drilling rig is expected to then be skidded
on the same drill pad as Oza-1 to a new drilling slot and a
horizontal development well will be drilled in the L2.4 zone and
placed on production. The Oza-1 well and new horizontal development
well are anticipated to generate significant production levels and
cash flow in an abbreviated time frame due to the already existing
infrastructure in place. The Oza development is anticipated to then
continue with one or two more re-entries on existing wells and
additional development drilling program with a potential of eight
to ten wells being drilled for the full field development.
Additional early production and central processing facilities will
be added as required to accommodate additional production levels
from field development activities.
The Oza Oil Field has significant export and
production capacity through processing facilities and
infrastructure already in place and operational, which will allow
for the immediate export and sale of crude oil from the Oza-1
well.
The Oza Oil Field Summary
As previously announced, the Oza Oil Field was
formerly operated by Shell Petroleum Development Company of Nigeria
Ltd. (“Shell”). The field has three wells and one
side track drilled between 1959 and 1974. During the period when
Shell was the operator, there were two periods of extended
production testing from the Oza-1, -2 & -4 wells. The field was
however never tied into an export facility, nor was it fully
developed by Shell and put into commercial production.
In 2003, the Oza Oil Field was awarded to
Millenium Oil and Gas Company Limited
(“Millenium”) having won the field during the 2003
Marginal Fields Licensing Round. Since Millenium’s acquisition of
the Oza Oil Field, approximately US$50 million has been spent on
infrastructure in support of a restart of production including an
export pipeline to tie the Oza Oil Field production into the Trans
Niger Pipeline (TNP) which goes to the Bonny Export Terminal, a
lease automatic custody transfer (LACT) unit fiscal metering
system, infield flow-lines, manifolds, and related production
facilities.
The Risk Service Agreement
(“RSA”) that Decklar and Millenium entered
provides Decklar the majority share of production and associated
cash flow from the Oza Oil Field in exchange for funding and
technical assistance to restart commercial production and full
field development; the RSA terms include a preferential return of
Decklar’s costs plus a share of cash flow thereafter. In exchange,
Decklar is entitled to priority recovery of its capital from 80% of
distributable funds. After achieving cost recovery, Decklar’s
profit share is based on a sliding scale starting at 80% and
declining to 40% once cumulative production exceeds 10 million
bbls.
Decklar is also pleased to announce that it
continues to make good progress on evaluations and negotiations for
additional proven undeveloped oil and gas fields in Nigeria that
have significant reserves and near-term production potential.
For further information:
Duncan T. BlountChief Executive Officer
Telephone: +1 305 890 6516Email: dblount@decklarresources.com
David HalpinVP Finance, Decklar Petroleum
Telephone: +1 403 816
3029Email:davidhalpin@decklarpetroleum.com
Investor Relations:
info@decklarresources.com
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Cautionary Language
Certain statements made and information
contained herein constitute "forward-looking information" (within
the meaning of applicable Canadian securities legislation),
including completion of the remaining portion of the Offering. All
statements in this news release, other than statements of
historical facts, are forward-looking statements. Such statements
and information (together, "forward looking statements") relate to
future events or the Company's future performance, business
prospects or opportunities.
All statements other than statements of
historical fact may be forward-looking statements. Any statements
that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions
or future events or performance (often, but not always, using words
or phrases such as "seek", "anticipate", "plan", "continue",
"estimate", "expect", "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should",
"believe" and similar expressions) are not statements of historical
fact and may be "forward-looking statements". Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. The Company believes that the expectations reflected in
those forward-looking statements are reasonable, but no assurance
can be given that these expectations will prove to be correct and
such forward-looking statements should not be unduly relied upon.
The Company does not intend, and does not assume any obligation, to
update these forward-looking statements, except as required by
applicable laws. These forward-looking statements involve risks and
uncertainties relating to, among other things, changes in oil
prices, results of exploration and development activities,
uninsured risks, regulatory changes, defects in title, availability
of materials and equipment, timeliness of government or other
regulatory approvals, actual performance of facilities,
availability of financing on reasonable terms, availability of
third party service providers, equipment and processes relative to
specifications and expectations and unanticipated environmental
impacts on operations. Actual results may differ materially from
those expressed or implied by such forward-looking statements.
The Company provides no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. The Company
does not assume the obligation to revise or update these
forward-looking statements after the date of this document or to
revise them to reflect the occurrence of future unanticipated
events, except as may be required under applicable securities
laws.
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