Allied Energy Plc (“Allied”), the operator of OMLs 120 and 121 in Nigeria, is awaiting the arrival of the Sedneth 701 semi-submersible drilling rig in order to commence drilling of the Oyo well #7. Transfer of the rig, pursuant to a Deed of Assignment with Transocean Ltd. and Nigerian Petroleum Development Corporation Limited (“NPDC”), has been delayed past the previously announced date of July 31, 2013 due to unanticipated drilling problems at its current location.
Currently, efforts are being made to resolve the problems at its current drilling location and release the rig to Allied. The Company currently expects that the spudding of Oyo # 7 well will be delayed at least until late August or early September. The well’s dual objectives are to increase production from the currently producing Pliocene reservoir and explore the resource potential in the deeper Miocene. During the first phase of drilling, expected to last 60 days, the plan is to drill down into the Miocene and, after testing, to plug the lower section of the well, move back up and drill directionally into the Pliocene reservoir.
After the completion of the first drilling phase, the rig will be released to NPDC per the previously announced Deed of Assignment between NPDC and Allied.
The second phase of drilling to complete the well and begin production will commence in 2014 upon receipt of the necessary long-lead items. Allied is currently in negotiations with a rig provider to lease a rig for the full twelve months of 2014 to complete well #7, drill and complete well #8 and potentially drill Oyo well #9 and one Miocene exploration well.