LGO Energy PLC Group Operational Update (9724D)
May 03 2017 - 1:00AM
UK Regulatory
TIDMLGO
RNS Number : 9724D
LGO Energy PLC
03 May 2017
For Immediate Release, 7 am
3 May 2017
LGO ENERGY PLC
("LGO" or the "Company")
Group Operational Update
LGO is today pleased to announce progress on its Trinidad
operations in both Goudron and the South West Peninsula, and also
provides an update on its activities in Spain.
Goudron Field, Trinidad
Following the completion of the initially planned two infill
wells, GY-682 and GY-683, Rig #18 has been temporarily demobilized
whilst new drilling contracts are negotiated. Additionally, some of
the ancillary equipment associated with the rig is being modified
in order to reduce the size of drilling locations needed, which
will save future earthworks and costs when the infill drilling
programme proceeds.
Four additional Mayaro Sandstone infill locations have been
fully approved by the Petroleum Company of Trinidad and Tobago
("Petrotrin") and the Ministry of Energy and Energy Industries
("MEEI") and work can commence as soon as the LGO Board approves
contracts for these wells.
Well GY-683, which initially flowed naturally without pumping
has now been put on rod pump at a stable average oil rate of 55
barrels oil per day ("bopd"), which remains significantly ahead of
the average prognosis of 45 bopd. GY-683 continues to produce dry
oil, strongly suggesting that it is not in communication with
depleted sandstone reservoirs already produced in any nearby
wells.
The earlier well, GY-682 was producing at an average of 32 bopd
in the first half of April with a relatively high water cut and by
contrast with GY-683 this may suggest that some of the perforated
zones are affected by depletion. Initial simple interventions to
improve oil production rate were undertaken in mid-April leading to
an erratic rate which has yet to stabilise. Since water handling is
not an issue at the Goudron Field GY-682 will be left on pump for
now and further interventions, including water shut-off, to restore
stable production closer to the initial oil rate of 55 bopd will be
undertaken as necessary.
Technical work supporting the first phase of the Goudron
waterflood enhanced oil recovery project is nearing completion and
final regulatory approvals will be sought over the coming
weeks.
Production from the Goudron Field in the first quarter of 2017
averaged 435 bopd. The second quarter will benefit from the recent
completion of the GY-682 and GY-683 wells and it is anticipated to
see a significant improvement in production as a result.
South West Peninsula, Trinidad
LGO, through its local subsidiary Leni Trinidad Limited ("LTL"),
holds an interest in all onshore private petroleum leases covering
in excess of 10,000 acres of the prospective, but underexplored,
South West Peninsula of Trinidad. Included in the leases are
several LTL 100% owned lease, as well as a 50% interest in the
Icacos Field and associated leases, which produces oil from shallow
reservoirs. In addition, LTL holds a 25% interest in Beach Oilfield
Limited ("BOLT") which owns the shallow Bonasse Field and
surrounding leases. LTL has an exclusive right to acquire the
remaining shareholding in BOLT under a Sale and Purchase Agreement
(the "SPA") announced 24 January 2017.
As discussions with various parties have not been completed LTL
has delayed the completion of the acquisition of BOLT and as a
result the longstop date in the SPA, previously 30 April 2017, has
been mutually waived by the parties.
Notwithstanding the decision to defer completion, LTL and BOLT
have commenced a handover of operations. During the last week of
April, LTL transported approximately 200 barrels of oil from
Bonasse to the sales point at Point Fortin approximately 30
kilometres from the field and this will sold to Petrotrin in the
next few days. LTL now expects to commence regular oil sales and to
start to increase production rates by the recommissioning of
existing wells and equipment at the field.
During the first quarter 2017 the Icacos Field produced 12 bopd
net to LTL's 50% interest.
Spain
Further to the Company's announcement of 9 February 2017 LGO's
Spanish subsidiary Compañía Petrolífera de Sedano, S.L.U. ("CPS")
has been working with the Ministry of Energy, Tourism and Digital
Agenda ("Ministry") to close all relevant files associated with the
previous La Lora Concession. Once that process is completed the
Hydrocarbons Department of the Ministry can commence the formal
issuing of a tender for a new concession covering oil operations at
the Ayoluengo Field. A final inspection of the Company's physical
suspension arrangements is anticipated to be made by the Ministry
in May and then notice of the tender is expected to be issued.
Other than regular site inspections by CPS's senior HSE
engineer, no work is now being undertaken at Ayoluengo. All wells
remain suspended and all oil previously produced from the field has
been sold and exported. Staff employment contracts are also
suspended.
Neil Ritson, LGO's Chief Executive Officer, commented:
"Increasingly LGO is focusing on its South West Peninsula assets
and is looking forward to completing the licensing process and an
independent resources evaluation this year. The recommencement of
oil operations at the Bonasse Field is very encouraging and adds to
the growing momentum the Company has at the Goudron Field."
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:
+44 (0) 203 794
LGO Energy plc 9230
Neil Ritson/Fergus Jenkins
+44(0) 20 7628
Beaumont Cornish Limited 3396
Nomad and Joint Broker
Rosalind Hill Abrahams/Roland Cornish
+44 (0) 20 3005
VSA Capital 5000
Joint Broker
Andrew Monk/Andrew Raca
+44 (0) 20 3757
Camarco 4983
Public and Investor Relations
Gordon Poole/Billy Clegg
Glossary:
bopd barrels of oil per day
----------------- ---------------------------------------------
dry oil crude oil produced with no appreciable
quantity of water
----------------- ---------------------------------------------
Mayaro Sandstone alternative name for the Goudron
Sandstones occurring at stratigraphic
intervals above the pre-Mayaro unconformity
----------------- ---------------------------------------------
perforated / the process of creating holes in
perforations the casing, typically using explosive
charges, to allow the reservoir to
be in communication with the production
wellbore
----------------- ---------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
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