Joint venture partners take FID on offshore Nigerian oilfield

offshore-nigeriaPanoro Energy has a 6.502 per cent interest in OML 113, which is operated by Yinka Folawiyo Petroleum and is located adjacent to Benin border. (Image source: Daktriper/Flickr)Panoro Energy, along with joint-venture partners, has taken a final investment decision (FID) to develop the Aje Cenomanian oil reservoir in Nigeria’s offshore OML113

The oilfield is additionally held by Yinka Folawiyo Petroleum, New Age, Afren, Energy Equity Resources and Jacka Resources.

The Aje field development plan (FDP) was submitted to the department of petroleum resources (DPR) earlier this year and approval to develop Aje as proposed in the FDP was granted in March 2014.

First oil from Aje is scheduled for the end of Q4 2015 at an initial gross production rate of around 10,000 bpd, according to a company press release.

The FDP is primarily focused on the development of the Cenomanian oil reservoir and Phase 1 of the Cenomanian development includes two subsea production wells tied back to a leased floating, production, storage and offloading vessel (FPSO) by Rubicon.

As part of Phase 1, the Aje-4 well will be re-entered and completed and a new well Aje-5 will be drilled. The Aje-5 well will be drilled from a seabed location adjacent to Aje-4 and both wells will be connected via a subsea manifold and production flowlines to the FPSO, the company said.

The Aje-5 well trajectory is reportedly designed to intersect the Cenomanian reservoir close to where the Aje-2 well intersected the Cenomanian reservoir. This subsurface target has been selected since Aje-2 demonstrated excellent productivity in a Cenomanian production test conducted in 1997 where it flowed at 3,766 bpd of 41˚API oil, the company said.

Phase 1 has an estimated funding requirement of US$220mn on a 100 per cent field basis to reach first. Panoro Energy’s share of Phase 1 costs are expected to be funded through the company's available cash resources. The company also has the financial flexibility to source an optimum level of debt for project development.

An independent review by AGR Tracs assessed there to be additional contingent resources within the Cenomanian reservoir that may be accessed through Phase 2 of the development comprising two further development wells in the Cenomanian oil reservoir.

The joint-venture partners will move onwards with Phase 2 once Phase 1 is on production, which means that Phase 2 capital expenditure may be funded from Phase 1 production cash flow.

Furthermore the separate Turonian gas reservoir, which is rich in condensate and LPG and also has a thin oil rim, has been assessed by AGR Tracs to contain significant additional contingent resources. The joint-venture partners are expected to take a decision to proceed with a development of the Turonian reservoir at a later date.

In Q1 2014 the OML113 partners had acquired approximately 1,000 sq km of new 3D seismic data over the license. In conjunction with the ongoing development work, exploration activities on OML 113 continue with the processing of the acquired 3D data. The final pre-stack depth migration is scheduled for completion by end of Q1 2015.

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