28th Jan 2015 12:44
LONDON (Alliance News) - SacOil Holdings Ltd Wednesday said that first phase development operations at the Lagia oil field in Sinai, onshore Egypt, have been completed on time.
Completion of the first phase development, which had the aim of stimulating and re-completing the five existing production wells at the oil field in order to increase production, means SacOil is now awaiting the beginning of second phase operations.
SacOil said it is confident that the targeted average production of 350 barrels of oil a day will be achievable from the five wells once they are in sustained production.
Chief Executive Thabo Kgogo said the news is a key milestone for SacOil, marking a "transformation" from an exploration and production company into realizing revenues from the sale of crude oil.
"The next phase of our operations at the Lagia oil field will focus on increasing production, as well as maintaining cost efficiencies and profitability during this oil price cycle," Kgogo said.
The CEO also said the company has a close eye on oil prices, which have fallen significantly over the past few months.
"For the time being our net cash position remains positive and we remain committed to our strategic focus of portfolio rationalization, capital restructuring and overall cost savings," Kgogo said.
According to the company, the next phase of operations is expected to begin by June this year, with plans including the installation of steam facilities for a thermal recovery process on the existing production wells.
The second phase plans also include drilling up to five additional thermal wells at the Lagia oil field, with the intent of further enhancing production and the recovery of oil at the oil field.
SacOil shares were up 9.1% at 1.50 pence on Wednesday.
By Samuel Agini; [email protected]; @samuelagini
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