13th Mar 2017 07:00
For Immediate Release
13 March 2017
LGO ENERGY PLC
("LGO" or the "Company")
Successful well GY-682, Goudron Field, Trinidad
LGO, the oil and gas company with reserves, resources and production onshore Trinidad, is pleased to announce that its first development well GY-682 in the new drilling campaign on the Company's Goudron Field, reached total depth ("TD") at 1,145 feet measured depth on 8 March 2017. Electric log interpretation of the Mayaro Sandstone target interval confirms the presence of oil over an estimated net reservoir thickness of 408 feet. It has been decided to perforate and place on production 273 feet of the best net oil pay within the Mayaro reservoir.
Well GY-682 will shortly be put on production with a downhole pump and a stabilised production rate will be established, at which point the Company expects to announce the average initial flow rate. GY-682 is one of a programme of planned Mayaro infill wells, each of which is forecast to have average initial production rates of 45 barrels of oil per day ("bopd") of light sweet crude, with low decline rates. The well was drilled on time, in 5 days, without incident and is expected to be on budget; costing US$500,000.
Neil Ritson, LGO's Chief Executive, commented:
"I am delighted that, having sorted out the balance sheet issues in 2016, we are back to development drilling at Goudron. The first well has been a success, having drilled to TD in under a week and is showing the expected net oil pay. Production will start shortly, adding to our production base and the rig will move to the next well site. After months of restructuring, we now have momentum back in the business."
The next well, GY-683, in the shallow infill program will be spudded shortly. Three additional wells have been now approved by the Ministry of Energy and Energy Industries as part of the ongoing development in which 45 wells have already received environmental approvals.
LGO has 11.8 million barrels ("mmbbls") of Proven and Probable Reserves ("2P") in the Goudron Field and is currently producing light sweet oil with an average API gravity of 37 degrees. In addition to its reserve base LGO has significant low risk, onshore upside in the Trinidad portfolio including 22 mmbbls of most-likely ("P50") Contingent Resources ("2C") in the Goudron Field and an estimated gross P50 unrisked oil in place of 1.3 billion barrels in the South West Peninsula leases.
Qualified Person's Statement:
The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Chairman for LGO Energy plc, who has over 38 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 (FGS).
Enquiries:
LGO Energy plc | +44 (0) 203 794 9230 |
Neil Ritson/Fergus Jenkins | |
Beaumont Cornish Limited | +44(0) 20 7628 3396 |
Nomad and Joint Broker | |
Rosalind Hill Abrahams/Roland Cornish | |
FirstEnergy Capital LLP | +44(0) 20 7448 0200 |
Joint Broker | |
Jonathan Wright/David van Erp | |
VSA Capital | +44 (0) 20 3005 5000 |
Financial Advisers | |
Andrew Monk/Andrew Raca | |
Camarco | +44 (0) 20 3757 4983 |
Public and Investor Relations Gordon Poole/Billy Clegg |
Glossary:
2C | most likely or P50 Contingent Resources according to PRMS |
2P | the Proven plus Probable Reserves according to PRMS |
API gravity | a measure of oil density. API gravity is the inverse measure of a petroleum liquid's density relative to that of water, which is designated with a value 10. If one petroleum liquid is less dense than another, it has a greater API gravity |
electric logs | tools used within the wellbore to measure the rock and fluid properties of the surrounding formations |
Mayaro Sandstone | alternative name for the Goudron Sandstones occurring at stratigraphic intervals above the pre-Mayaro unconformity |
oil in place or STOIIP | stock tank oil initially in place, those quantities of oil that are estimated to be in known reservoirs prior to production commencing |
P50 (best estimate) | the most likely estimate of a parameter based on all available data, also often termed the P50 (or the value of a probability distribution of outcomes at the 50% confidence level) |
pay or net pay | a reservoir or portion of a reservoir 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 |
perforate / perforations | the process of creating holes in the casing, typically using explosive charges, to allow the reservoir to be in communication with the production wellbore |
PRMS | the Society of Petroleum Engineer's Petroleum Resources Management System |
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) |
Proven 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 |
TD | total depth |
Notes to Editors
LGO Energy plc is an onshore Trinidad focused production, development and exploration company. The Company has an estimated 11.8 mmbbls of 2P reserves in the Goudron field which produces light sweet crude (average 37 degree API).
In addition to its reserve base, LGO has significant low risk, onshore upside in the Trinidad portfolio with 22 mmbbls of 2C contingent resources in the Goudron field, associated with an enhanced oil recovery waterflood project, and an estimated unrisked oil in place of 1.3 billion barrels in the South West Peninsula leases.
Trinidad has an established oil economy with infrastructure, skills and people. Trinidad has produced over 3 billion barrels of oil to date onshore over the last 100 years and the geology is low risk and highly prospective. Major oil companies operating in country include BP, Shell, BHP Billiton and Perenco. Despite the historical financial constraints, LGO has maintained its license to operate with strong relationships with the State Oil Company, communities, supply chain and Government.
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