2nd Jun 2014 07:00
For Immediate Release, 7 am
2 June 2014
Leni Gas & Oil PLC
("LGO" or the "Company")
Goudron wells GY-664 Production and GY-665 Drilling Update
LGO is today pleased to announce that well GY-664 has been successfully brought on production at a stabilized free flowing, post-clean up, rate of 240 barrels of 37 API oil per day. The well is flowing under its own pressure through a 7/32-inch choke at a wellhead pressure of 660 psi, without any water or sand production.
The second development well, GY-665, which has an anticipated total depth of 3,500 feet is now at the intermediate casing point at 1,606 feet and has intersected approximately 310 feet of gross oil sand in the Goudron sandstones.
Neil Ritson, LGO's Chief Executive, commented:
"This is a very significant outcome and I am sure it will be completely transformational for the field and the Company. As the first new production well on the field for over 30 years, GY-664 was drilled with an on-balance mud system and completed with modern tubing conveyed guns. The initial flow rate demonstrates the value of this approach; exceeding the historic averages four-fold. We fully expect many more similar results as the drilling campaign progresses and indeed well GY-665 is already showing considerable potential."
GY-664 Oil Production:
A 278-foot section of the Gros Morne sandstone member of the Moruga Formation was perforated using tubing conveyed (TCP) guns between 2,177 and 3,205 feet. The TCP guns were fired at 08:25 hours (Trinidad local time) on Friday, 30 May 2014. The well was completed with 2 7/8-inch production tubing and after perforation it initially flowed naturally at a rate up to 326 barrels of oil per day ("bopd") through a restricted choke and has now been stabilized at a rate of 240 bopd after running a number of flow tests at various choke settings. The well has been flowing through a 7/32-inch choke at a wellhead pressure of 660 psi. Production at this rate has been stable for the last 36 hours with wellhead pressures remaining constant at between 660-700 psi.
No attempt has been made to open the choke to allow unrestricted flow. The flow rate is being deliberately restricted in order to maximize the long-term production potential from the well and to avoid any potential damage to the reservoir or the acceleration of water production.
Initial pre-drill flow rate assumptions were of at least 60 bopd based on historic data from the field, however, the improved drilling and perforating practices used have greatly assisted in reducing formation damage and improving oil inflow characteristics.
GY-665 Update:
Well GY-665, the second of 30 new development wells is in the process of being logged before setting casing at the base of the Goudron sands at a depth of 1,606 feet. The well has encountered the anticipated oil bearing Goudron sandstones with approximately minimum of 310 feet of gross oil pay based on the mud logging. After casing has been set, the well will be drilled to the primary target in the Gros Morne sandstones.
Well GY-665 is approximately 800 feet south-west of the GY-664 and is the first of four planned wells from the same drill pad. GY-665, has a planned total depth of 3,500 feet and is anticipated to intersect with all three prospective reservoir intervals; the Goudron, Gros Morne and Lower Cruse, and is expected to encounter the Lower Cruse at around 3,000 feet. Wells GY-664 and GY-665 are separated by a known fault zone with the Lower Cruse reservoir anticipated to be structurally shallower in GY-665.
Competent Person's Statement:
The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Director for Leni Gas & Oil 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:
Leni Gas & Oil plc
David Lenigas Neil Ritson | +44 (0)20 7440 0645 |
Beaumont Cornish Limited
Nomad and Joint Broker Rosalind Hill Abrahams Roland Cornish | +44(0) 20 7628 3396 |
Old Park Lane Capital Plc
Joint Broker Michael Parnes | +44(0) 20 7493 8188 |
Pelham Bell Pottinger
Financial PR Mark Antelme | +44 (0) 20 7861 3232 |
Henry Lerwill |
About LGO:
LGO holds production, development and exploration assets in both Trinidad and Spain.
The Goudron Field in Trinidad is the Company's current flagship project. The Company owns and operates the Incremental Production Services Contract at Goudron, a field that it acquired for redevelopment in 2012. Oil originally estimated to be in-place of 126 million barrels ("mmbbls") has historically received only limited production and it is independently estimated that approximately 122 mmbbls remain accessible for primary recovery. LGO, through its local Trinidadian subsidiary, Goudron E&P Limited, has reactivated 75 existing wells on the field which are expected to access approximately 1.1 mmbbls of the proven (1P) oil reserves. The new wells being drilled are designed to access significant additional oil reserves estimated as being up to 30 mmbbls (3P), prior to the initiation of a secondary recovery program of water-flooding that is anticipated to increase reserves to up to over 60 mmbbls.
LGO also holds a 50% non-operated interest in the producing Icacos Field in the Cedros Peninsula of southwestern Trinidad and a significant number of other 100% private petroleum leases in the Cedros totaling over 7,500 gross acres where the Company anticipates additional production and exploration activities in the next few years.
In northern Spain LGO owns (100%) and operates the Ayoluengo and Hontomin Fields. Ayoluengo has been operated by LGO for the past 5 years and produces from 12 legacy wells acquired at that time. Independent original oil-in-place at Ayoluengo is estimated to total 124 mmbbls. The Hontomin Field is awaiting the granting of Production Concession, which is anticipated later in 2014.
Glossary:
original oil-in-place | the volume of oil estimated to have been initially in place |
mmbbls | millions of barrels |
Possible Reserves (3P)
| those additional reserves which analysis of geoscience and engineering data suggest are less likely to be recoverable than Probable Reserves. The total quantities ultimately recovered from the project have a low probability to exceed the sum of Proved plus Probable plus Possible (3P) Reserves, which is equivalent to the high estimate scenario |
Probable Reserves (2P)
| 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) |
Proven Reserves (1P) | those quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations |
The estimates provide in this statement are based on the Petroleum Resources Management System ("PRMS") published by the Society of Petroleum Engineers ("SPE") and are reported consistent with the SPE's 2011 guidelines. All definitions used in this announcement have the meaning given to them in the PRMS.
Related Shares:
CERP.L