Erin Energy posts bigger loss over impairments of oil & gas properties

Drillship Pacific Bora

U.S. oil and gas company Erin Energy, formerly known as Camac Energy, deepened its net loss for the 2Q 2017 mainly owing to impairment charges on its oil and gas properties.

Erin Energy informed on Wednesday that, in the second-quarter 2017, it recorded a net loss of $98.6 million, primarily as a result of a non-cash impairment of its oil and gas properties of $78.7 million, compared to a net loss of $22.6 million for the comparative period 2016.

Second-quarter 2017 revenues were $14.6 million compared to $23.2 million in the second-quarter 2016.

For the second-quarter 2017, net daily production was approximately 5,100 bopd, compared with 5,400 bopd for the comparative period in 2016. The company lifted and sold approximately 309,000 net barrels of oil at an average price of $47.15 per barrel, compared to approximately 508,000 net barrels of oil at an average price of $45.58 per barrel during the comparative period 2016.

When it comes to its current operations, Erin said it plans to spud the Oyo-9 well on the Oyo field in deepwater offshore Nigeria within the week. The drillship Pacific Bora arrived on the Oyo field on August 1. The well is expected to add an additional 6,000 to 7,000 barrels of oil per day from the field.

The company has the option to drill up to two additional wells with the Pacific Bora. Subject to capital availability, the company will use the Pacific Bora to drill one to two of its Miocene exploration prospects. Erin Energy has four drill-ready prospects, which target P50 Prospective Resources of 2.4 billion barrels of oil.

The Oyo field produces into the Bumi Armada-owned FPSO Armada Perdana, which has a production capacity of 40,000 barrels of oil per day, and storage capacity of 1.1 million barrels. Erin and Bumi are currently in talks to resolve an issue arising from Erin’s debts towards the vessel owner for the hire and operations of the FPSO.

Namely, Bumi in June suspended the operations on the FPSO due to payment delays from Erin only to allow Erin to flow its Oyo produced oil into the FPSO cargo tanks earlier this week. However, the issue remains unresolved as payments remain outstanding.

Over in Ghana, Erin is planning a new 3-D marine seismic acquisition survey over its Expanded Shallow Water Tano block. A formal invitation to tender to marine seismic vendors is expected to be issued to marine seismic vendors during the second half of 2017.

Offshore Energy Today Staff

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