Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
" However, completing an allocation of new options to continuing members of the Board, executive and staff was not permitted during the course of drilling of the Saffron-2 well, as that constituted a closed period for these purposes. Likewise, the allocation of new options will not be permitted once production testing of the Saffron-2 well commences, as that again would comprise a closed period for these purposes. Given that production testing of Saffron-2 has not yet commenced but is expected to commence imminently, the allocation of new options has thus been finalised at this time, during what is an open period for these purposes."
Calling for “a full and detailed public accounting of all fees paid by Challenger to the Government of The Bahamas over the last two decades”, Our Islands, Our Future added: “It is of grave public concern that Challenger has a history of non-payment.....
Full text ...
http://www.tribune242.com/news/2021/jul/14/full-accounting-demanded-oil-opponents/
I sense that there is feverish activity behind the scenes and I wonder if CEG are playing for time while trying to find a potential transaction similar to how CERP were rescued from oblivion by selling themselves off to BPC. My view is based on constant overruns and lack of clarity about specifics, such as the true state of finances. Clearly S2 is costing way more than original estimates and there is material uncertainty as to eventual outcome.
CERP delayed accounts that they eventually never published to investors and CEG could be heading down the same path. Is history repeating itself and is the company close to the brink, or am I being paranoid? Just my own thoughts so DYOR and ATB.
Ms Ingraham added that the government should “use this opportunity to do two good things”, namely protect the tourism and fisheries industries by imposing “a permanent ban on oil drilling in Bahamian waters”.
She was backed by Casuarina McKinney-Lambert, the Bahamas Reef Environment Educational Foundation’s (BREEF) executive director, who branded Challenger’s licence fee arrears as “a serious red flag questioning their ability or willingness to pay in the event of a disaster”.
“We would like to see an accounting of the licence fees that have been paid and what is still outstanding,” she said. “This seems to be very unclear. I understand that the company also has outstanding payments due to the drilling company, Stena, and one of the funding sources in addition to the licence fees owed to The Bahamas."
Full article ...
http://www.tribune242.com/news/2021/jul/02/opponents-fear-doors-left-open-oil-licences/?news
S2 Update 24 June - "The impact of this decision to set additional casing (and associated additional logging runs) is expected to be an additional 7 days of rig time, and associated additional cost. Accordingly, drilling and logging of Saffron-2 is now expected to be completed on or around 30th June 2021. "
Will the additional cost of S2 be disputed?
Starchild - " The Gov believes $1.9m is owed in back-fees (plus $1m for 2021), and CEG is disputing at least $1m of these back-fees. "
"CEG does NOT need this $10m until it settles with Stena et al for legacy Percy-1 costs. The bills amount to $14m although $7m is disputed. " (10 June)
How many outstanding costs in total are disputed? Does CEG have a track record of disputing bills?
Perhaps the company can give some indication of what remains outstanding?
Geological Society
Most of us understand the criticality of the energy sector and its impact on the nation’s economy.
TT has a well-established energy sector, over 100 years, which spans many cycles of "boom or bust".
The advent of the natural gas sector in Trinidad through the late ’90s into the 2000s showed significant promise, with TT being one of the world’s largest exporters of LNG. The birth of Atlantic LNG has been a huge revenue earner for a country of this size, with four liquefaction plants, serving exports to all corners of the globe. This period is directly linked to the growth of the petrochemical sector and industrial growth in Pt Lisas.
Underpinning this has been the role of international oil and gas companies (IOCs) in the island, some of the world’s largest, who have invested significant amounts of money to find and develop the hydrocarbon resources which we hold.
Recent years have provided significant challenges to the upstream industry in TT. Global commodity prices are challenged and our nation has felt the economic ramifications through lower revenues. This is exemplified by recent news of petrochemical plant closures, Atlantic LNG supply issues, mixed results from both exploration bid rounds and exploration and production (E&P) drilling campaigns offshore. This perfect storm on the bedrock of our economy (~28 per cent GDP) combined with the global covid19 pandemic is a crisis that we all should appreciate and understand.
Gas supply has been something we take for granted in Trinidad. It seems a distant past when the Columbus basin (see map) proved to be a rich playground for finding hydrocarbons. There was a hugely successful patch in the 1990s with the advent of 3D seismic technology, which “changed the game” for professionals to get a picture of the hydrocarbon reservoirs and where to target. Significant developments have fuelled the conveyor belt of gas supply to domestic and LNG markets. In the last ten years there has been a steady decline in production from the highs of four bcf/d to 2.5 bcf/d. This production decline results greatly reduced revenues to our nation and needs to be halted or reversed.
Trinidad has seen a shift of activity into deep-water areas, where finding oil and gas reserves becomes technically challenging. Discoveries are required to be sizeable to meet economic thresholds and be monetised. The “low hanging fruit” have been picked from the different basins. With the juxtaposition of lower oil and gas prices, companies are challenged more than ever to make projects economically attractive (even though we are seeing somewhat of a rebound currently mainly as big nations move past covid19).
Full text ...
https://newsday.co.tt/2021/06/17/big-push-needed-for-survival-of-trinidad-and-tobagos-energy-sector/
Bohemia - "And $51.31 per barrel pricing is not very impressive for those suggesting they are profitable. Brent has averaged $63, so a 19% discount. "
From latest audited accounts of Heritage Petroleum:-
"Subsequent to year end, crude prices have averaged US$48/barrel up to January 2021 compared to US$38/barrel for the six months ended 30 September 2020".
This has now been amended on Heritage website to:-
"Subsequent to year end, crude prices have averaged US$55/barrel up to April 2021 compared to US$38/barrel for the six months ended 30 September 2020".
You will no doubt be aware of the relationship between CEG and Heritage?
Interesting to note that Heritage is in default with its lenders. Details in the accounts.
https://heritage.co.tt/heritage-petroleum-financial-statements-september-2020/
If S2 comes in as hoped, you may all get to enjoy the lifestyle that Starchild aspires to. I expect he will now say he already does ;)
https://www.youtube.com/watch?v=ePUTIIaurOY
Challenger’s now-completed Perseverance One well failed to discover commercial oil quantities some 90 miles west of Andros, and Mr Smith said this backdrop - as well as “the ongoing challenges” in establishing the joint bank account - meant a new initiative was required to break the three month-plus “stay” that has halted his clients’ Judicial Review since March 1.
To do this, Save the Bays and Waterkeepers Bahamas will pay $100,000 directly to Graham, Thompson & Co as “security” for Challenger’s legal costs. In return, the oil explorer will “consent” to the activists’ bid to lift the stay so the matter can be heard “in the interests of the Bahamian public”.
“The rationale for varying the ‘security for costs’ is that the proposed drastic reduction in the scope of the Judicial Review ought to have a significant impact on costs and therefore on the level of security required,” Mr Smith said.
And he added that his clients were also prepared to abandon their challenge to the licences and environmental approvals granted in 2020 to then-BPC for the Perseverance One well given that it had long been completed.
They would instead narrow their action to focus on the permits and approvals that Challenger will require should it be successful in obtaining a three-year extension to its licences from the Government, which would come with an obligation to drill another exploratory well in Bahamian waters during that period. The licence applications have already been submitted to the Minnis administration, which is determining if to approve them.
Mr Smith said his clients will focus on whether future wells require site plan approval under the Planning and Subdivisions Act; an excavation permit under the Conservation and Protection of the Physical Landscape of The Bahamas Act; Environmental Planning and Protection Act approvals; and compliance with treaties controlling and prohibiting pollution at sea (MARPOL).
http://www.tribune242.com/news/2021/jun/23/oil-opponents-bid-end-legal-roadblock/
Yes it's useful to make a comparison between S1 and S2 since they are both drilled from the same pad and S2 is essentially an attempt to circumvent the problems encountered by S1 at Lower Cruse.
It's notable to remind that , "In the Middle Cruse, we discovered medium quality crude (17° to 20° API) with a high water cut (circa 90%-95%)". The high water content will undoubtedly have impacted lifting costs at S1 as 100 barrels of fluid will only produce circa 5 barrels of oil after separation.
Leo Koot, Executive Chairman of Columbus, commented:
"We have found what we were looking for - the Saffron well has discovered oil in both the Lower Cruse and Middle Cruse formations in the South West Peninsula, onshore Trinidad. These discoveries are transformational for Columbus creating two valuable standalone field developments.
Our main pre-drill goal of establishing the existence of hydrocarbons in the Lower Cruse has been achieved, significantly de-risking what we expect will be an imminent Saffron field development. We achieved light, high quality oil flow to surface (circa 40° API) from two test intervals in the Lower Cruse. For operational reasons (including prudent cost management), our testing was deliberately limited to a combined perforation of 16' even though the logging of the Lower Cruse showed over 300 feet of high-quality sands. As such, we believe that the appraisal of the Lower Cruse, expected in Q3 2020, will be stage 1 of a Lower Cruse development that we now calculate has an NPV of circa US$90m.
I am particularly pleased to share with our investors and the market that, in order to fast track the appraisal/development of the Lower Cruse, we have signed a Term Sheet with a third party drilling contractor to drill a second well in the Lower Cruse, the same contractor who drilled the Saffron well. It is expected that the well will be drilled in Q3 2020, subject to a stabilised oil price (above US$35 for a sustained period) and operating environment. The well will be fully funded by that third party in return for a share of the production from Saffron 2.
Whilst drilling the Saffron well, the Company encountered a total of 6 intervals in the Lower Cruse, Middle Cruse and Upper Cruse that merited testing and, to date, we have tested 3 intervals (2 in the Lower Cruse and 1 in the Middle Cruse).
In the Middle Cruse, we discovered medium quality crude (17° to 20° API) with a high water cut (circa 90%-95%). The Middle Cruse reservoir shows good pressure support, with the right completion design and field development plan, we can deliver a reliable oil and revenue stream from the multiple oil-bearing intervals we have identified. We have already sold our first oil produced from the Middle Cruse to Heritage (340 bbls).
I am therefore confident that we will be able to produce commercial quantities of quality oil from both the Lower Cruse and the Middle Cruse.
In the coming months, we intend to finish our testing campaign and work with our partner to drill Saffron 2. Alongside this, we will continue to produce from the Middle Cruse and progress a Middle Cruse appraisal and development campaign when the timing is right given market conditions.
I am really excited with our results to date with the Saffron well and I would encourage you to read the corporate and operational update and watch the accompanying video that are available on our website. "
Compare with S1 ...
Mon, 27th Apr 2020 07:00
RNS Number : 8833K
Columbus Energy Resources PLC
27 April 2020
27 April 2020
COLUMBUS ENERGY RESOURCES PLC
("Columbus" or the "Company")
Saffron Discoveries - Lower Cruse and Middle Cruse
Columbus, the oil and gas producer and explorer focused on onshore Trinidad and Suriname, is pleased to announce that the Saffron well has discovered oil in the Lower Cruse and Middle Cruse, located in the South West Peninsula, onshore Trinidad.
The Company has made a Saffron oil discovery presentation and video available on its website. The presentation also includes a corporate and operational update. To view them, please visit https://columbus-erp.com/investors/reports-and-documents/ and https://columbus-erp.com/news/videos/
The key highlights of the Saffron well are:
• Oil discoveries in the Lower Cruse and Middle Cruse
• 2363 ft of Gross sands with six reservoir intervals of interest with a 47% Net/Gross ratio
• Well reached Total Depth ("TD") at 4,634 feet, as planned
• 6 intervals identified for testing, with 3 intervals tested to date
• In the Lower Cruse, high quality, light oil (circa 40° API) recovered to surface
• Results in line with the Company's pre-drill estimates for recovery of oil from a Lower Cruse development (11.5mmbbl)
• Signed terms for a full carry of the second Saffron Lower Cruse appraisal and development well (expected Q3 2020)
• In the Middle Cruse, discovery of a medium quality crude (17° to 20° API)
• Currently producing oil from first perforated interval in the Middle Cruse
• Middle Cruse oil processed on location and first 340 bbls oil sold through existing infrastructure
• Preparing to test the Middle Cruse in additional oil bearing zones
• Preparing individual development plans for the Middle and Lower Cruse discoveries
Compare with communications when S1 was being drilled ...
Thu, 12th Dec 2019 09:30
RNS Number : 6633W
Columbus Energy Resources PLC
12 December 2019
12 December 2019
COLUMBUS ENERGY RESOURCES PLC
("Columbus" or the "Company")
Update on Saffron well - South West Peninsula, Trinidad
Columbus, the oil and gas producer and explorer with operations in Trinidad and Suriname, is pleased to provide an update on the progress of the Saffron well, currently being drilling in the South West Peninsula, Trinidad.
The drilling of the Saffron well is continuing as planned with encouraging results to date. The 8 ½" pilot hole was successfully drilled to the planned depth and encountered hydrocarbon bearing zones within the tertiary target. This provided the Company with the knowledge and confidence to widen to the 17 ½" hole size and set 13 5/8" casing, which would allow future testing of encountered oil zones on a successful completion of the well.
Whilst drilling the 12 ¼" section, further shows of oil bearing intervals have been encountered within the secondary target as well as high formation pressures. This has required careful measures to ensure the wellbore is in a stable condition whilst continuing to drill. The Company is currently drilling ahead the main 8 ½" hole section with which it is planned to reach our prognosed Lower Cruse primary target. On achievement of the TD (Total Depth) criteria the Company intends to log and perform production testing of the well, as appropriate.
The Company will update, when appropriate, as drilling continues.
Leo Koot, Executive Chairman of Columbus, commented:
"The drilling of the Saffron well is progressing towards our total depth target and we have been encouraged by various oil and gas shows throughout the drilling campaign. I have been at the rig-site during the critical phases of the well campaign and continue to supervise day to day operations. The knowledge of the formations and rig systems gained so far from drilling the Saffron well is being applied to the final stages as we reach the primary target and will also prove valuable information for the future wells within the Southwest Peninsula including any development drilling. The Company looks forward to updating the market as appropriate."
delta LO ?
"A contract for Stena IceMAX has been signed with an
undisclosed operator for a one well campaign (30 days)
commencing in Q4 2021."
I just read through the ...
STENA AB (PUBL.)
INTERIM REPORT FOR
THE THREE-MONTH PERIOD
1 JANUARY – 31 MARCH 2021
... to see if their was any mention of BPC/CERP. I didn't see any reference to the P1 drill but Icemax was mentioned as per ...
"A contract for Stena IceMAX has been signed with an
undisclosed operator for a one well campaign (30 days)
commencing in Q4 2021."
I presume the undisclosed operator is not CEG but who knows?
It's to be hoped that payment of drilling costs to Stena relating to P1 does not end in arbitration. Stena has successfully won a case recently ...
"On 5 March 2021, a London Arbitration Tribunal determined
certain issues in dispute between Stena Atlantic
Limited (“Stena”) and Samsung Heavy Industries Co, Ltd
(“SHI”) over the construction of a harsh environment
semi-submersible drilling unit, formerly known as “Stena
MidMAX”. The Contract for the unit was signed on 26 June
2013 with delivery of the unit to be made by 20 March
2016. The Contract was terminated by Stena on 1 June
2017 due to excessive delay. SHI disputed the termination
and referred the dispute to London Arbitration. The Tribunal
determined that Stena’s termination of the Contract was
valid and in doing so dismissed all claims by SHI against
Stena. The Tribunal also ordered payment by SHI to Stena of
the minimum sum of USD 411 million by way of refundment
of Stena’s pre-delivery payments plus further amounts in
respect of interest and project costs. Based on the value of
the receivable recognized in the Stena accounts, the award
from the tribunal did not have any significant impact on the
profit and loss statement of the Stena AB Group."
The incident with GY-678 almost saw the end of the company and BNP Paribas effectively took over control of expenditure to ensure they recovered the funds outstanding. Presumably BNP Paribas were not convinced to fund another drill or sidetrack GY-678 and when, eventually, BNP Paribas handed back the reins of control, after reaching a settlement with the company, we are into the Koot era.
I don't know why GY-678 disappeared off radar and no explanation or rationale was ever given as far as I am aware. Perhaps Koot wanted to do things his own way and GY-678 simply didn't figure in his plans.
The question is, why did they never go back to GY-678? I don't think they could afford another drill of that magnitude but it remains a mystery, if indeed the well was as promising as claimed, that no apparent attempt was ever made to revisit that well.
Druid - "Was GY 678 a C sands target, and if it had mechanical problems, that is no reason to write off a GREAT reservoir like that!"
LGO Energy plc has provided an update on its recently drilled well GY-678. In the interim statement released on 18 September 2015, the Company reported a mechanical problem had been encountered with well GY-678, the last of its seven planned wells in 2015 to the C-Sand formation. The Company attempted to recover the downhole equipment which was causing an obstruction below the 9 5/8-in. casing, however, without success. Consequently a cement plug has now been set in the surface casing of the well and the rig has been released, pending a decision on possible re-entry and sidetracking, or re-drilling, to reach the extensive C-sand net oil pay zone previously drilled and logged in the well.
This mechanical loss has significant cost implications for the Company, as in addition to the cost of the well and the unsuccessful recovery attempts totaling approximately US$1.9 million, the Company is potentially liable for the cost of the lost downhole equipment of approximately US$1.5 million.
As previously reported, the net oil pay observed in GY-678 was exceptionally thick. The loss of anticipated production from this well has had a negative impact on the Group's cash flow forecasts to the extent that the liquidity ratios as specified in the Group's banking arrangements with BNP Paribas (Bank) have dropped below those originally envisaged in the covenants associated with the loan.
The Company is currently reviewing various options in constructive discussions with the Bank, however, in the meantime the Bank have indicated that no further amounts can be drawn against the facility. Currently, the Company has approximately US$12 million drawn down under these banking arrangements, although due to lower oil price forecasts the repayments over the life of the loan are now expected to be less than the funds drawn. Payments under the pre-paid swap arrangements with the Bank continue to be made as initially planned.
Separately, the Group is continuing with the planning work for a program of activity in the Goudron Sandstone (as announced on 24 September 2015) with the benefit of the funds recently raised for that purpose. The production gained from that work, once underway, is expected to improve cash flow.
Neil Ritson, LGO's Chief Executive, commented:
"Stuck pipe incidents are not common and despite taking extensive precautions during the drilling of the 15 new wells, this incident, which occurred at the very end of the programme, is a setback for LGO. Whilst there is no long term impact to the Company's assets and indeed the GY-678 well has shown that there is more and better C-sand reservoir than previously known, the short-term financial impact has to be managed. The Company is still planning for additional Goudron Sandstone production and will report further on its plans in the coming months."