oando

Oando Energy Resources (OER) submitted its operational highlights out of Nigeria on August 14. During Q2 the company saw 2,500 bpd, 1,069 net to OER, in additional production capacity from the Ebendo Marginal Field following the successful completion of the Ebendo-5 well. For the six months ending June 30 the company was averaging 3,924 bopd (net) in production.

Oando Petroleum Development Company (OPDC), in conjunction with Energia Ltd., the operator of the Ebendo Marginal Field, drilled and initially completed the Ebendo-5 well with the Acme Rig 5, after which the rig was demobilized. The well was drilled to a TVD of 11,513 ft and encountered eight hydrocarbon bearing sands. Ebendo-5 was initially completed as a two string multiple on three zones (XV, XVIIIc & XVIIId). The well is currently closed-in pending the completion of the alternative Umugini pipeline and evacuation infrastructure.

With the completion of the surface locations for additional wells, 6 and 7, another rig, Deutag T-26, was mobilized to drill the Ebendo-6 well in order to appraise the shallow reservoir and develop the intermediate reservoirs earlier discovered during the drilling of the Ebendo-4 and Ebendo-5 wells. The Ebendo-6 well was drilled to a total depth of 11,268 ft MD and discovered two shallow reservoirs and further appraised five intermediate reservoirs (located in the XV, XVI, XVII, XVIIIa & XVIIIb sands). The Ebendo-6 well was being perforated and tested across the XV and XVI sands during the end of the reporting period and will be initially completed as a dual producer and closed-in.

The company also reported that it awarded a contract for the laying of an alternative pipeline to the Umusadege-Kwale-Agip Brass evacuation route and work has already commenced. The total contract sum, which was originally sanctioned at $35.5 million by the pipeline consortium, has been subsequently revised to $64.1 million, (OER’s share $6.9 million). Expected completion is Q4 with commissioning anticipated by Q1 2014.

Oando OML125 Ltd, in conjunction with Nigeria Agip Energy, operator of OML 125, has commenced the Abo Phase 3 development plan and successfully completed the sidetrack of the Abo-4 well with a moored semi-submersible rig, the GSF-135, which was subsequently demobilized. Another dynamically positioning rig, the Sedco-Express, has since mobilized and commenced work to re-enter the Abo-3 well for an up-dip sidetrack.

Moving on to the Akepo Field Marginal Field, the second part of Akepo field development which is comprised of the construction of evacuation infrastructure (wellhead jacket, pipelines, and a tie-in to NNPC/NAE/ConocoPhillips’ Beniboye flow station) remained stalled in 2013 due to contractor issues, which limited execution capability. With escalating costs and a limited favorable offshore weather window for shallow offshore activities, the original lump sum contract has been broken up and the offshore jacket installation and pipe lay scope was re-awarded.

At the Qua Ibo Field Marginal Field OER, through its companies Oando Qua Iboe (OQIL) & Oando Reservoir and Production Services (ORPS) owns a 40% operating interest (subject to government consent). The company provides financial and technical services to Network Exploration & Production Nigeria Ltd., the 60% equity owner of the field and operator.

Phase 1 activities were completed during Q2, these activities consisted of drilling and completing the QI-4 and QI-3ST1 wells. The QI-4 well, which was intended as an appraisal/development well, was drilled to a total depth of 6,840 ft MD in order to appraise the shallower C-levels sands. It encountered natural gas in the C1 reservoir and oil in the C4 reservoir. The well was subsequently converted to a development well and was completed as a single string electrical submersible pump producer. Owing to currently limited crude storage and handling capacity, the production testing has been postponed until the oil evacuation infrastructure and surface facilities are completed.

QI-3ST1, a sidetrack targeting the D5 North reservoir, was drilled to a total depth of 10,773 ft MD, and encountered oil in two distinct lobes (upper and lower) in the D5 North reservoir. The well, which was initially completed as a single string selective producer, was subsequently re-completed as a dual string producer with the D5 north lower reservoir producing 950 bpd (0.51 Mmscf/d) and the D5 North upper reservoir producing 1,078 bpd (0.83 Mmscf/d), on 28/64” choke.

Both strings are currently shut-in pending the completion and commissioning of the crude processing facilities & evacuation infrastructure.

The Qua Ibo oil evacuation infrastructure, consisting of the crude processing facility which is undergoing FEED and tie-in to a jointly operated group gathering facility (that subsequently will tie in to ExxonMobil’s Qua Ibo Terminal, is in advanced stages of completion.

Also during Q2 the company pursued a number of integration-related activities in order to ensure the appropriate technical synergies and a more robust assessment of ConcoPhillips’ Nigerian assets. This included finalizing specifications for subsurface software applications, hardware, document and data archiving, as well as progressing the various procurement processes. Financing-related efforts are continuing as scheduled.

“Our second quarter was characterized by the continued progression of our proposed acquisition of ConocoPhillips’ Nigerian assets through the filing of a Cdn$550 million preliminary short form base shelf prospectus as well as by our operational activities that have grown our existing production capacity by 3,454 bopd,” said OER CEO, Pade Durotoye. “Looking forward, our team remains focused on becoming Nigeria’s leading indigenous energy company by completing this proposed acquisition and maximizing the value inherent in our current suite of high quality assets.”

 

Information from Petroleum Africa was used in this report.

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