LONDON (Alliance News) - LGO Energy PLC Wednesday said it has successfully re-completed the GY-671 well on the Goudron field in Trinidad, which has began producing oil from a new interval as a result, but said production from the well has fallen from initial rates after it was choked back.
The company said a total of 208.0 feet of perforations have been added to the Upper C-sand reservoir that is being targeted by the well after LGO set a packer to isolate the new zone. A packer is a device that initially has a smaller outside diameter which then expands externally to seal the wellbore once inside.
That particular sandstone interval has not previously been completed in any of the other surrounding wells.
The well was producing around 240 barrels of oil per day after initial clean-up work, but is now producing a natural stabilised rate of 80 barrels a day after it was choked back through a 6/32 inch choke.
Before the well was re-completed when there was "a prolonged period of limited operations" on the field, production from the entire Goudron field was running at 403 barrels of oil per day, which will now grow moving forward following the re-completion of GY-671.
LGO said it plans to publish its production results for the first quarter of 2016 sometime in early May.
"We are delighted to have located a number of low cost re-completions at a time when the company remains capital constrained, but when oil prices have stabilized and we can take advantage of reduced overriding royalty rates granted recently," said Chief Executive Neil Ritson.
LGO said back in March that a reduction in overriding royalty rates for the Goudron field that are paid to Petroleum Co of Trinidad & Tobago Ltd had come into force from the start of February, dropping to below 10.0%.
The GY-671 well is the first of at least six other existing wells on the field that will be targeted to boost production. The next well, GY-50, is expected to be completed next week over a 164.0 foot interval that holds a previously unexploited net oil pay in the Goudron Sandstones, the company said.
"The company is continuing to work on financing solutions to resolve its current banking and creditor issues, as previously announced, and is intending to make a further update announcement shortly," said LGO.
In early March, LGO terminated the formal sales process that it launched back in November after identifying alternative refinancing opportunities that the company believed were more attractive, but has so far not revealed any detail on what the new opportunities are. However, LGO has since raised GBP280,000 after expenses by issuing shares priced at 0.25 pence in April.
LGO shares were trading up 2.4% to 0.297 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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