24 Jan 2022 07:00
24 January 2022
Advance Energy plc
("Advance Energy" or the "Company")
Buffalo Project Update
Advance Energy (AIM:ADV), the energy company seeking growth through acquisition or farm-in to non-operated interests in discovered upstream projects, provides the following update on the Buffalo-10 well, located offshore Timor-Leste.
The Operator, Carnarvon Petroleum Timor, Lda., has advised the Company that since the last update the wireline logging operations have been completed with only residual oil being encountered.
The well will therefore be plugged and abandoned, and the rig demobilised.
Leslie Peterkin, CEO of Advance Energy, commented:
"The results of B-10 are both disappointing and hugely surprising given the independently verified risk assessment which confirmed a highly likely commercial outcome from the well. Across the JV, we invested a significant amount of technical work into the project which underpinned our high degree of confidence that the well would unlock the significant value of the field.
The post-well evaluation indicates that the well was drilled into the hanging wall of a fault, although uncertainty in seismic resolution also contributed to the reservoir being significantly deeper than expected at this location. It is not the case that this result means that all of the attic oil volumes certified by RISC have been negated. The Buffalo Joint Venture will conduct further technical analysis in the coming weeks to fully understand why the attic was not encountered as prognosed at the drilled location.
We believe it is likely that the JV will relinquish the Buffalo asset as neither company wishes to fund a second appraisal well in the field.
Looking ahead, Advance Energy remains funded for the immediate near-term and the team has been working on a pipeline of identified, attractive opportunities. We will now turn our full attention to bringing at least one of these to fruition this year. These are value accretive opportunities and include an opportunity with cash flow, which would be suitable for debt or vendor financing. Our immediate priority will be to significantly reduce costs while we assess the next steps for the growth of the Company."
Enquiries:
Advance Energy plc Leslie Peterkin (CEO) / Stephen West (CFO) | +44 (0)1624 681 250 | ||
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Strand Hanson Limited (Financial and Nominated Adviser) Rory Murphy / James Harris / James Bellman | +44 (0)20 7409 3494 | ||
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Buchanan (Public Relations) Ben Romney / Jon Krinks | +44 (0)20 7466 5000 | ||
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Tennyson Securities Limited (Joint Broker) Peter Krens / Ed Haig-Thomas | +44 (0)20 7186 9030 | ||
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Optiva Securities Limited (Joint Broker) Christian Dennis | +44 (0)20 3411 1881 | ||
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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.