13th Apr 2016 09:08
LONDON (Alliance News) - Lekoil Ltd Wednesday said production is set to hit 10,000 barrels per day by the end of this year and then double in 2017 after the company completed production tests on the latest well to be drilled on the Otakikpo marginal field onshore Nigeria.
The company said the Otakikpo-002 well flowed oil from two upper zones over two production tests carried out in 24-hour period. The C5 zone flowed 6,404 barrels of oil per day whilst the C6 zone flowed at a rate of 5,864 barrels a day, both on a 36/64 inch choke.
The flow rate was higher than the capacity of the production testing equipment, meaning it had to be curtailed and also implying production rates could have been higher.
Commercial production will begin during the second quarter of 2016.
Lekoil was previously set to bring the first zone, E1, into production after achieving a flow rate of 5,703 barrels of oil per day. However, cementing issues meant that remedial work has to be carried out and therefore this zone will not be developed until after the two zones unveiled Wednesday.
Lekoil will now re-enter the Otakikpo-003 well once the current well has been completed, targeting that lower E1 zone and also the C5 zone.
"The company expects to commence commercial production from Otakikpo-003 in the third quarter of 2016 and expects to be producing 10,000 barrels a day by year-end 2016. The facilities construction and permits are at an advanced stage to meet the company's timeline for commercial production," said the company.
To put that figure into perspective, Lekoil was planning to produce only 6,000 barrels of oil per day from these wells, meaning it is likely to "significantly exceed" this target. It also signifies the start of meaningful production by the company.
Phase two of the development will happen next year when new wells come online to double production to 20,000 barrels of oil per day in 2017.
Lekoil shares were up 3.3% to 15.50 pence per share on Wednesday.
By Joshua Warner; [email protected]; @JoshAlliance
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