TIDMSRSP
RNS Number : 3773H
Sirius Petroleum PLC
12 March 2018
12 March 2018
Sirius Petroleum Plc
("Sirius" or "the Company")
Ororo Field - Operational Update
Mobilisation of Rig for Ororo Field Drilling Program
Sirius Petroleum (AIM: SRSP), the Nigeria focused oil and gas
development and production company, is pleased to announce that the
Company's international rig partner COSL has now received
preliminary Location Approval from the Marine Warranty Surveyor for
the Ororo-2 and Ororo-3 wells and has commenced mobilisation of the
jack-up rig for delivery direct to Nigeria.
Furthermore, COSL have optimised the drilling campaign for
Sirius by electing to deploy the COSL Force jack-up rig as opposed
to the COSL Power. The COSL Force is a "hot rig" (tooled-up and
ready to operate) currently offshore UAE and is therefore ready to
be mobilised to Nigeria shortly. The COSL Force is a new-build
state of the art rig which has a rated operating water depth of 375
ft and a rated drilling depth of 30,000 ft.
Once on station, it is anticipated, weather conditions
permitting, that drilling of the Ororo-2 well will now commence in
April 2018 and that drilling will be in a location close to the
Ororo-1 well (originally successfully drilled by Chevron in
1986).
The Ororo-2 well is planned to penetrate all of the D sands,
with the top three sands (D1, D2 and D3) being sampled and pressure
tested. The objectives of the tests are to determine gas-oil
contacts, the pressure regimes, fluid compositions, and in-situ
gas-oil ratios ahead of an extended well test. The well will then
be drilled down to the deeper G sands where it is expected to be
completed for production.
According to the Ororo CPR produced by Rockflow Resources
("Rockflow") and set out in the Company's admission document, it is
estimated that the Ororo-2 well will initially produce
approximately 2,700bopd of light oil and 6mmcfd of gas. Rockflow
estimates that the Ororo asset has a Mid Case Net Present Value to
Sirius (NPV10) of $96m, based on a $65 per barrel flat real oil
price for the life of the field.
In addition, Sirius has concluded amended terms with COSL for
the COSL Force jack-up rig, extending the initial program to cover
both the Ororo 2 and Ororo 3 drill programs for a lump sum of $9m
(payable in instalments related to drilling milestones), on the
assumption that the duration of the work will not exceed 90 days
from the spud of the first well in the program and assumes a 45 day
work duration per well. If the duration of the work exceeds that
period, then daily rates will thereafter apply. In accordance with
the amended agreement, Sirius has made an initial deposit payment
of $1.5m to COSL.
Commenting, Bobo Kuti, Chief Executive, said: "We are delighted
to be informed that COSL has finally secured the confirmation from
the Marine Warranty Surveyor of the acceptance of the surface
location of Ororo-2 and Ororo-3 wells enabling us to announce the
mobilisation of the COSL Force jack-up rig. This is a milestone for
Sirius as we embark with our operational partners on the first of
our drilling programs. We are delighted to be working alongside
COSL as our rig partners and thank them for the excellent work they
have done on mobilisation and we look forward to the commencement
of the well campaign operations on Ororo-2 in the coming
months."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
Ends
Enquiries:
Sirius Petroleum +44 20 3740 7640
Bobo Kuti, Chief Executive
Mark Henderson, Chief Financial Officer
Cantor Fitzgerald Europe +44 20 7894 7000
David Porter/Nick Tulloch
Gable Communications +44 20 7193 7463
John Bick srsp@gablecommunications.com
Sirius Petroleum's Strategy and the Ororo Field
The Company's strategy is to target proven opportunities and
maximize hydrocarbon production and recovery through the
acquisition of discovered assets in Nigeria, with a particular
focus on shallow water offshore areas and realise upside potential
through appraisal activities.
Sirius's initial focus is the Ororo field, which was originally
operated by Chevron in 1986. Chevron drilled Ororo-1 and
hydrocarbons were discovered in seven sandstone reservoirs (D1 to
D5, F and G). Four of the reservoirs in the original Ororo-1 well
were tested, two produced oil (D3 and G) at a combined rate of
2,800 bopd and two produced gas condensate (D4 and D5).
The Ororo field is located within OML 95 in the Niger Delta,
offshore Nigeria, in the western part of the prolific Niger Delta
petroleum system. It lies in shallow waters offshore Ondo State in
water depths ranging between 23ft and 27ft. The field is adjacent
to the Mina, West Isan, Ewan, Eko and Parabe fields, all of which
are operated by Chevron.
Sirius has a 40% economic interest under a Financial &
Technical Service Agreement and entered into a Joint Operating
Agreement ('JOA') in August 2017 with its indigenous partners Owena
Oil & Gas (100% state owned entity) and Guarantee Petroleum,
who own 27% and 33% respectively. According to the Ororo CPR, the
mid-case gross recoverable 2C contingent resources are 24
mmboe.
Sirius has agreed innovative funding and operating partnerships
with global industry leaders to execute the drilling campaign to
first oil. The initial Ororo-2 well program aims at delivering an
initial production of 2,700 bopd in H1 2018.
Ororo economic evaluations produced by Rockflow subsequent to
issue of the CPR:
Oil Price Gross Gross Gross Sirius Sirius Sirius
Project Project Project Project Project Project
NPV10 NPV10 NPV10 NPV10 NPV10 NPV10
US$ US$ US$ US$ US$ US$
MM Low MM Mid MM High MM Low MM Med MM High
---------- --------- --------- --------- --------- --------- ---------
65 126.5 279.4 695.2 32.9 96.1 274.3
---------- --------- --------- --------- --------- --------- ---------
70 144.6 309.1 756.9 40.9 108.9 300.9
---------- --------- --------- --------- --------- --------- ---------
Gas BOE conversion factor: 1 barrel of oil equivalent = 5800 cu
ft gas
*Under SPE Guidelines, the hydrocarbons are classified as
Contingent Resources and will convert into Reserves upon
finalisation of approvals and agreements with contractors. The
valuation methodology used by Rockflow provides for the commercial
producible resources to be defined rather than the technically
producible oil. Under the present oil price scenario this results
in a modest change for the tail end volumes in relation to the
volumetrics reported on 2(nd) June 2017
Review by Competent Person
In accordance with the guidelines of the AIM Market of the
London Stock Exchange, the technical information contained in this
announcement has been reviewed and approved by Tom Gunningham
MA(Oxon) CEng MEI, a chartered petroleum engineer and reserves
auditor for Rockflow Resources, who has over 27 years industry
experience and meets the criteria of a qualified person under the
AIM guidance note for mining and oil and gas companies.
Glossary
Bopd: barrels of oil per day
Mmboe: million barrels of oil equivalent
Contingent Resources estimated at a certain
resource: date as potentially recoverable
from known accumulations, but which
are not currently considered commercially
recoverable
2C: Proved and Probable Contingent Resources
This information is provided by RNS
The company news service from the London Stock Exchange
END
UPDUUUBRWRAOARR
(END) Dow Jones Newswires
March 12, 2018 03:30 ET (07:30 GMT)
Sirius Petroleum (LSE:SRSP)
Historical Stock Chart
From Apr 2024 to May 2024
Sirius Petroleum (LSE:SRSP)
Historical Stock Chart
From May 2023 to May 2024