30 Jun 2021 07:30
30 June 2021
Advance Energy plc
("Advance Energy" or the "Company")
Buffalo-10 Drilling Update
Advance Energy plc (AIM:ADV), the energy company seeking growth through acquisition or farm-in to non-operated interests in discovered upstream projects, is pleased to provide an update on the Buffalo-10 well drilling operations, including the selection of a jack-up drilling rig for the expected commencement of drilling in late October 2021.
Highlights
· The Operator, Carnarvon Petroleum Limited ("Carnarvon") (ASX:CVN) has announced an update on the Buffalo-10 well drilling operations
· A jack-up drilling rig for the Buffalo-10 well has been selected
· A Letter of Intent ("LOI") has been agreed and the formal rig contract is being finalised
· On the current schedule, drilling of the well is expected to commence in late October 2021
· The results of the well can be expected to be available in late November/early December 2021
After an Invitation to Tender process, a jack-up drilling rig has been selected as the preferred rig for drilling the Buffalo-10 well. Carnarvon has entered into a LOI with the rig contractor, and a formal contract, consistent with the terms of the LOI, is now being finalised. Carnarvon is expecting to take possession of the drilling rig upon the completion of its current drilling operations, which is planned to occur around the end of October 2021.
The final well timing will be subject to securing remaining drilling support services and equipment, and joint venture and regulatory approvals, all of which are in progress and are not expected to impact the well's expected commencement date.
The Buffalo-10 well is designed to test the presence of a significant attic oil accumulation remaining after the original development and convert the 2C resources of 34.3 MMstb to 2P (proved and probable) reserves following re-certification.
Advance Energy's CEO Leslie Peterkin commented:
"We are delighted to hear this progress from Carnarvon, which signals a key milestone in the process of re-developing the Buffalo field. It is also important to note that the selected rig will have drilled four wells before arriving on site at the Buffalo field, which means that the crew and the rig operations will be at their most efficient.
As a reminder to shareholders, the drilling of this well is transformational to Advance Energy, representing a potential material value catalyst for the Company. In the case of the 2C resource being established as reserves, there is potential to deliver a gross production rate of around 40,000 barrels per day (20,000 barrels per day net to Advance Energy) by the end of 2023, which in this current pricing environment would deliver exceptionally strong cash flow and compelling rates of return.
We look forward to providing further updates in the next few months as we continue to progress towards the well drilling in October 2021."
Enquiries:
Advance Energy plc |
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Leslie Peterkin (CEO) / Stephen West (CFO) | +44 (0)1624 681 250 | |
Strand Hanson Limited (Financial and Nominated Adviser) | ||
Rory Murphy / James Harris/ James Bellman/ Georgia Langoulant | +44 (0)20 7409 3494 | |
Buchanan (Public Relations) | ||
Ben Romney / Kelsey Traynor | +44 (0)20 7466 5000 | |
Tennyson Securities Limited (Joint Broker) |
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Peter Krens / Ed Haig-Thomas | +44 (0)20 7186 9030 | |
Optiva Securities Limited (Joint Broker) | ||
Christian Dennis | +44 (0)20 3411 1881 | |
For further information, please visit www.advanceplc.com and @advanceplc on Twitter
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The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.