22nd Mar 2017 07:00
For Immediate Release
22 March 2017
LGO ENERGY PLC
("LGO" or the "Company")
Well GY-682 successfully placed on production, Goudron Field, Trinidad
LGO is pleased to announce that its first development well GY-682 in the new drilling campaign on the Company's Goudron Field, which was drilled to a total depth of 1,145 feet measured depth and perforated over a 273-foot interval of net oil pay within the Mayaro reservoir, is now on production at a stable initial rate of 55 barrels oil per day ("bopd") of light sweet crude oil.
Neil Ritson, LGO's Chief Executive, commented:
"As the momentum is restored in the LGO business it is encouraging that the first of our programme of infill wells has come on production above the expected average rate whilst remaining on time and budget. Our production base is now growing and management is confident that a sustained campaign of low risk drilling to the shallow Mayaro formation will substantially raise production, in parallel with work on the planned waterflood project."
After perforating and completion the well has been slowly brought up to rate on the downhole pump by increasing the surface pump speed and stroke length and the well is now considered to have reached a long-term stable initial production 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 bopd of light sweet crude, with historically low decline rates shown by over 100 existing field wells to be consistently less than 20% per annum. The second well, GY-683, is anticipated to spud in the next few days and is targeting a similar interval of proven oil pay in the Mayaro Sandstone.
Three additional wells have now been approved by the Ministry of Energy and Energy Industries as part of the ongoing development in which 45 wells have already received environmental approvals. Drilling of these wells is expected to be undertaken after a short period of evaluation of the first two wells, GY-682 and 683, and of the performance of the new drilling contractor and equipment.
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 |
Notes to Editors
LGO Energy plc ("LGO") is an onshore Trinidad focused production, development and exploration company.
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.
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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