LGO Energy PLC Operational Update (3958U)
29 July 2015 - 4:03PM
UK Regulatory
TIDMLGO
RNS Number : 3958U
LGO Energy PLC
29 July 2015
For Immediate Release, 7am
29 July 2015
LGO ENERGY PLC
("LGO" or the "Company")
Operational Update
LGO is pleased to announce that its latest development well,
GY-676, at its Goudron Field development in Trinidad, reached total
depth at 3,545 feet measured depth ("MD") on 19 July 2015. Electric
log interpretation from both the Goudron Sandstone and C-sand
intervals confirms the presence of recoverable hydrocarbons, with
the net hydrocarbon pay in the main C-sand target estimated as 222
feet. The well has been successfully cased for future
production.
Well GY-676 is the fifth of the seven 2015 wells and the second
well from drilling Pad 5 in the north-east of the field. Net oil
pay in the Goudron Sandstone was encountered between 535 and 1,255
feet with an estimated 250 feet of total net pay. The oil bearing
C-sand interval was encountered between 1,870 and 3,455 feet MD.
Shows of light oil at surface were reported at a depth of 2,077
feet, typical for these wells which are drilled close to pressure
balance. Net hydrocarbon bearing pay in the C-sand interval is
estimated as 222 feet. These observed net pay zones are fully in
line with pre-drill expectations for this well.
The next well in the planned sequence, GY-677, the sixth in the
2015 program, and the fourteenth in the field redevelopment program
has now been spudded and drilled and cased to the first casing
point at 355 feet MD.
Second Quarter Production
Group oil production averaged 951 bopd during the second quarter
2015. This includes managed natural depletion from the new wells
drilled last year on Pads 1, 2 and 3 at Goudron. This figure does
not reflect production from Goudron Pad 4 since wells GY-672,
GY-673 and GY-674, were drilled during the second quarter and only
brought on line at the end of the period. Operations continue to
optimise production from those new Pad 4 wells and a further update
on that will be issued in due course. Once all seven 2015 wells
have been completed the Company will be able to update production
guidance.
Future Goudron Drilling Plans
Well Services Rig 70 has been moved to the next cellar on Pad 5
and it has spudded the sixth well of the 2015 program, GY-677,
which is planned to be drilled to a total depth of 3,286 feet MD
(3,000 feet TVDss) at a location 540 feet south-west of the surface
location. Well GY-677 is once again targeting a C-sand reservoir
interval.
The final well in the 2015 C-sand program, well GY-678, will be
drilled from Pad 3 and will target an area which is similar to the
very successful well GY-670 which was flowed at rates above 1,000
barrels of oil per day in late 2014. Further drilling on Pad 5 is
planned for at a later date. Well GY-678 will be designated a "data
well" with additional tests including the cutting of a 30-foot core
in the C-sand. This additional data is key to the planned enhanced
oil recovery ("EOR") project for which we are planning a pilot
project which we anticipate commencing in 2016.
A program of shallow Goudron Sandstone wells, which can be
drilled using a smaller drilling rig, is now being worked-up with
plans to commence that work later in the year. A rig has been
identified and it is being brought up to necessary specifications
for this work. Sites are being selected for the drilling of simple
low cost vertical wells to depths up to 1,700 feet in order to
exploit the Goudron Sandstone. The thirteen wells drilled in our
2014 and 2015 campaigns have so far exhibited an average of 288
feet of net oil pay in the Goudron Sandstone. Site preparation can
be scaled back considerably with the use of the small footprint
rig, and locations can therefore be sited close to Goudron
Sandstone targets across the field.
As previously announced, the recent independent reserves
assessment by LR Senergy identified between 170 and 343 million
barrels of Proved and Probable oil in place in the Goudron
Sandstone. This new drilling work is intended to start to convert a
portion of that to producing reserves and broaden the production
base. To accommodate the expanded drilling program, we have made
the necessary applications for the current 30 well environmental
approvals to be increased to 60 wells.
Fergus Jenkins, LGO's Chief Operating Officer, commented:
"Our C-sand drilling program at Goudron continues to progress
very well and we are now on our sixth new well in 2015. Drilling
times and costs have been markedly reduced from 2014 and we have
been collecting valuable data to plan the future development of the
field, including the EOR project which has exciting potential.
Goudron continues to operate in a very efficient fashion with low
historical operating costs of less than $10 per barrel which is
beneficial in the low oil price environment in which we continue to
have to operate."
Steve Horton, LGO's Chairman, commented:
"The Company has a sound investment case for the long-term
development of its portfolio in Spain and Trinidad. The Goudron
asset in Trinidad, with its low operating cost, is especially
robust to low oil prices and we are confident of the Company's
underlying value."
Qualified Person's Statement:
The information contained in this announcement has been reviewed
and approved by Neil Ritson, Chief Executive Officer and Director
for LGO Energy plc, who has over 35 years of relevant experience in
the oil industry. Mr. Ritson is a member of the Society of
Petroleum Engineers (SPE), an Active Member of the American
Association of Petroleum Geologists (AAPG) and is a Fellow of the
Geological Society of London.
Enquiries:
LGO Energy plc +44 (0) 203 794 9230
Neil Ritson
Fergus Jenkins
Beaumont Cornish Limited +44(0) 20 7628 3396
Nomad
Rosalind Hill Abrahams
Roland Cornish
FirstEnergy Capital LLP +44(0) 20 7448 0200
Joint Broker
Jonathan Wright
David van Erp
Bell Pottinger +44 (0) 20 3772 2500
Financial PR
Henry Lerwill
Glossary:
C-sand sandstone reservoirs below the pre-Mayaro
unconformity and above the pre-Lower
Cruse unconformity encompassing sandstones
of equivalent age to both the Gros
Morne and the Lower Cruse formations
------------------ ----------------------------------------------
EOR enhanced oil recovery
------------------ ----------------------------------------------
oil in place stock tank oil initially in place,
or STOIIP those quantities of oil that are
estimated to be in known reservoirs
prior to production commencing
------------------ ----------------------------------------------
pay and net a reservoir or portion of a reservoir
pay formation that contains economically
producible hydrocarbons. The overall
interval in which pay sections occur
is the gross pay; the portion of
the gross pay that meets specific
criteria such as minimum porosity,
permeability and hydrocarbon saturation
are termed net pay
------------------ ----------------------------------------------
proved reserves those quantities of petroleum, which,
by analysis of geoscience and
engineering data, can be estimated
with reasonable certainty to be commercially
recoverable (1P), from a given date
forward, from known reservoirs and
under defined economic conditions,
operating methods, and government
regulations
------------------ ----------------------------------------------
probable reserves those additional reserves which analysis
of geoscience and engineering data
indicate are less likely to be recovered
than Proved Reserves but more certain
to be recovered than Possible Reserves.
It is equally likely that actual
remaining quantities recovered will
be greater than or less than the
sum of the estimated Proved plus
Probable Reserves (2P)
------------------ ----------------------------------------------
MD measured depth; the depth of a well
measured along the length of the
borehole
------------------ ----------------------------------------------
TD total depth
------------------ ----------------------------------------------
TVDss true vertical depth below the sea
level datum
------------------ ----------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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