18th Jul 2016 07:00
For Immediate Release: Embargoed until 7 am
18 July 2016
LGO ENERGY PLC
("LGO" or the "Company")
Updated Resource Assessment, Goudron Oil Field, Trinidad
The Company is today pleased to announce the results of the latest annual independent resource review of the LGO 100% operated Goudron Field ("Field") in southeast Trinidad conducted on the Company's behalf by Deloitte LLP ("Deloitte"). Volumes in all reserves categories; proven, probable and possible, have increased, as well as the estimated oil in place within the Field which has risen by over 20 percent. Estimated oil in place ("STOIIP") within the Field has increased since the 2015 independent review and is now reported to be up to 975 mmbbls. Gross proven and probable (2P) reserves of 11.79 million barrels of oil ("mmbbls") have been estimated, up 4 percent on the previous estimate. Proven reserves have increased by 22 percent in the last year once production of 240,000 barrels of oil, produced between the publishing of two reports, is accounted for.
Neil Ritson, LGO's Chief Executive, commented:
"This latest resource report confirms the very significant potential of the Goudron Field, with resource volumes increased in all areas from those reported in the 2015 assessment. The Company is working hard to continue development of the Field and the planning for a campaign of cost-effective wells targeted at the shallow Mayaro Sandstone reservoir is already well advanced."
Data gathered during the 2015 drilling campaign and additional technical work incorporating production data from wells drilled in 2014 and 2015, as well as the numerous older legacy wells, have been used to update both static and dynamic models of the field which were then audited by Deloitte's Resource Evaluation & Advisory team in Alberta, Canada.
Estimated oil in place ("STOIIP") within the Field has increased since the 2015 independent review and is now reported to be up to 975 mmbbls. The majority of the 21% increase relates to a thickening of the C-sand and pre-Cruse reservoir unit which is observed in logs of wells drilled during the 2015 campaign, notably well GY-678. The increased STOIIP is especially important in the context of a waterflood enhanced oil recovery ("EOR") project at Goudron which is currently at a planning stage.
Proved (1P) gross oil reserves in the Mayaro Sandstone and C-sand reservoirs has increased by 3% to 1.58 mmbbls, which when adjusted for production of 240,000 barrels represents a 22% increase in proven reserves when compared to the June 2015 resource report. The gross proven and probable reserves (2P) have increased by 4% to 11.79 mmbbls. Proved, probable and possible reserves (3P) have increased by 9% to 25.60 mmbbls.
The first resource report commissioned by LGO prior to acquiring the field in 2012 reported incremental estimated gross upside (3C) contingent resources of 63.20 mmbbls, related to a future EOR scheme. The 2015 report performed for the Company by LR Senergy did not consider contingent resources, however, the present Deloitte report includes a gross 3C estimate of 63.40 mmbbls, which is very close to the 2012 estimate and again confirms the significant potential inherent in the planned EOR phase of the development.
Qualified Person's Statement:
The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Director 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.
The estimates provided 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. A copy of the PRMS is available at http://www.spe.org/industry/reserves.php All definitions used in the announcement have the meaning given to them in the PRMS.
Enquiries:
LGO Energy plc | +44 (0) 203 794 9230 |
Neil Ritson | |
Fergus Jenkins | |
Beaumont Cornish Limited | +44 (0) 20 7628 3396 |
Nomad | |
Roland Cornish | |
Rosalind Hill Abrahams | |
FirstEnergy Capital LLP | +44 (0) 20 7448 0200 |
Joint Broker | |
Jonathan Wright | |
David van Erp | |
Bell Pottinger | +44 (0) 20 3772 2500 |
Financial PR | |
Henry Lerwill |
Glossary:
1P | proved reserves |
2P | proved plus probable reserves |
3P | proved plus probable plus possible reserves |
best estimate or P50 | 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) |
contingent resources | those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality |
C-sand | sandstone reservoirs below the pre-Mayaro unconformity and above the pre-Lower Cruse unconformity encompassing sandstones of equivalent age to both the Gros Morne and the Lower Cruse formations |
EOR | enhanced oil recovery |
Mayaro Sandstone | sandstone reservoirs above the pre-Mayaro unconformity, previously also referred to as the Goudron Sandstone |
mmbbls | million barrels of oil |
pre-Cruse | early to mid-Miocene sandstone reservoir below the pre-Cruse unconformity |
proved 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 |
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) |
possible reserves | 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 |
PRMS | Petroleum Resources Management System |
reserves | those quantities of petroleum anticipated to be commercially recovered by application of development projects to known accumulations from a given date forward under defined conditions |
STOIIP or oil in place | stock tank oil initially in place, those quantities of oil that are estimated to be in known reservoirs prior to production commencing |
Appendix
Table 1: Reserves Data
(all figures in mmbbls) | Asset | Gross | Net Attributable * | ||||
Proved | Proved + Probable | Proved + Probable + Possible | Proved | Proved + Probable | Proved + Probable + Possible | ||
Oil & Liquids reserves | Goudron | 1.58 | 11.79 | 25.60 | 1.34 | 10.27 | 22.35 |
Total Oil & Liquids | Total | 1.58 | 11.79 | 25.60 | 1.34 | 10.27 | 22.35 |
Note: "Gross" are 100% of reserves and/or resources attributable to the license whilst "Net attributable" are those attributable to the
Company after deduction of royalties and the State share of production.
Source: Deloitte, July 2016
Table 2: Contingent Resources Data
(all figures in mmbbls) | Gross | Net Attributable * | ||||
Low Estimate | Best Estimate | High Estimate | Low Estimate | Best Estimate | High Estimate | |
Oil & Liquids contingent resources (development unclarified) | 3.15 | 22.20 | 63.40 | 2.76 | 19.43 | 55.45 |
Total Oil & Liquids | 3.15 | 22.20 | 63.40 | 2.76 | 19.43 | 55.45 |
Note: "Gross" are 100% of reserves and/or resources attributable to the license whilst "Net attributable" are those attributable to the
Company after deduction of royalties and the State share of production.
Source: Deloitte, July 2016
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CERP.L