22 Oct 2012 07:00
Immediate Release, 7 am
22 October 2012
Leni Gas & Oil PLC
("LGO" or the "Company")
Acquisition in Trinidad
Leni Gas & Oil plc today announces the final transfer of 100% ownership of the Goudron Field Incremental Production Service Contract ("IPSC") onshore south-eastern Trinidad from the current contract owner Cameron Oil and Gas Limited ("COGL") to LGO's subsidiary Goudron E&P Limited ("GEPL").
The IPSC with the Petroleum Company of Trinidad Limited ("Petrotrin") remains in full force and all approvals were already in place to assign the contract and operatorship from COGL to GEPL.
Following the signing of the novation agreement on 19 October 2012 the transaction completed immediately and GEPL commenced full-time operations with a formal handover of the field taking place at site on 20 October 2012. Production revenues from the field will commence immediately.
LGO recently announced a workover program of five wells in collaboration with COGL and that work will now continue uninterrupted and will be extended to at least 30 additional wells.
Neil Ritson, LGO's Chief Executive, commented:
"Completion of the acquisition represents the culmination of a year's preparation and we are delighted to now take operatorship of the field. LGO has recently completed an independent reserves report and we see enormous potential for production enhancements and additional future development of Goudron. An LGO operated rig is already active on the field and the results from that program will be available shortly."
Competent Person's Statement:
The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Director for Leni Gas & Oil Plc who has over 35 years of relevant experience in the oil industry. Mr. Ritson is a member of the Society of Petroleum Engineers, an Active Member of the American Association of Petroleum Geologists and is a Fellow of the Geological Society of London.
Notes to Editors:
The Gourdon Field lies between the East Moruga, and Beach Marcelle fields in south-eastern Trinidad and has direct access to the Petrotrin oil export pipeline to the Pointe-a-Pierre refinery in western Trinidad. The field was originally discovered by Trinidad Leaseholding Limited in 1927 and was developed in its current form by Texaco between 1956 and 1986 when it passed to Petrotrin. A field reactivation contract was signed with COGL in late 2009.
The oil reservoirs are generally between 300 and 3,500 feet below surface and the oil is light low sulphur crude with API gravity ranging between 25 and 55 degrees and a mean of 32 degrees. Reservoirs are made up of the Goudron Sands and the deeper Gros Morne (Cruse equivalent) Sandstones.
LGO plans an initial work-over program aimed at improving the production from at least 50 existing wells through work involving well clean out (sand removal), limited reperforation and the installation of additional pumps (either beam or downhole). Additional infill drilling is expected to commence in 2013 in order to access further reservoir zones and to improve overall field performance using state-of-the-art drilling and completion techniques.
A recent independent reserves report by Challenge Energy Limited reported proven and probable (2P) reserves of 7.2 million barrels (mmbbls) and proven, probable and possible reserves (3P) of 30.4 mmbbls. All these reserves are associated with natural depletion alone and result from a program of work-overs, new wells and well side-tracks to be carried out over the economic life of the field.
No secondary recovery, such as water-flooding, has been assumed in current reserves estimates, although analogous fields in Trinidad have had successful water-flood projects. Overall recovery without water-flooding is estimated to be 10% of the oil-in-place which has been computed to be up to 350 mmbbls in the 3P case. Challenge recognizes up to a further 63.2 mmbbls of contingent resources associated with future water injection.
Additional potential has been identified in deeper reservoirs and also in underexplored portions of the concession which add considerable further reserves potential. Petroleum rights under the IPSC extend down to 5,000 feet subsea. The current term of the IPSC has 7 years remaining and the IPSC contains an extension period of 10 years running to 2030.
Enquiries:
Leni Gas & Oil plc
David Lenigas Neil Ritson | +44 (0)20 7440 0645
|
Beaumont Cornish Limited
Nomad and Joint Broker Rosalind Hill Abrahams Roland Cornish | +44(0) 20 7628 3396 |
Old Park Lane Capital Plc
Joint Broker Michael Parnes Luca Tenuta | +44(0) 20 7493 8188 |
Shore Capital
Joint Broker
Pascal Keane +44 (0) 20 7408 4090
Jerry Keen (Corporate Broking)
Pelham Bell Pottinger
Financial PR Mark Antelme | +44 (0) 20 7861 3232 |
Henry Lerwill |
Glossary:
Contingent Resources
| those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality |
Possible Reserves
| those additional reserves which analysis of geoscience and engineering data suggest are less likely to be recoverable than Probable Reserves. The total quantities ultimately recovered from the project have a low probability to exceed the sum of Proved plus Probable plus Possible (3P) Reserves, which is equivalent to the high estimate scenario |
Probable Reserves
| those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable Reserves |
Proven Reserves | those quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations |