BW Offshore changes Ruche development plan after success at Hibiscus

BW Offshore has revised its development plan for the Ruche project, located in the Dussafu Marine license offshore Gabon, including the Hibiscus discovery. The revised plan will result in higher production as well as project cost estimate.

FPSO BW Adolo
FPSO BW Adolo; Source: BW Offshore

The acquisition of 91.67% of the Dussafu Marine Permit in Gabon and the associated redeployment of the FPSO BW Adolo was the first project for BW Offshore under the new E&P strategy. The Dussafu license is situated within the Ruche Exclusive Exploitation Area, which covers 850 km2. BW Energy, a subsidiary of BW Offshore, is the field operator.

The initial development – Tortue Phase 1 – within the Ruche EEA consisted of the drilling of two horizontal subsea production wells, which were tied back to the FPSO BW Adolo. In September 2018, BW Offshore announced that first oil from Tortue Phase 1 had been achieved.

In addition to the Tortue Phase 1 development, the company has made the investment decision for Tortue Phase 2 following the successful appraisal program on the western flank of the Tortue field. Phase 2 includes drilling of up to four additional horizontal subsea production wells which will be tied back to BW Adolo.

BW Offshore on Wednesday, October 30 announced a revised Ruche development plan including the Hibiscus discovery, which will accelerate production growth from the Dussafu license.

 

Production to double 

 

According to BW, under the revised plan, estimated gross production from Ruche phase 1 is forecasted to double from 15,000 bbls/day to 30,000 bbls/day. These volumes will come in addition to the production from the Tortue field. The company also announced that the management estimate for the Hibiscus reserves had been confirmed by the independent auditor.

The changes to the Ruche development plan follow the recent successful Hibiscus exploration well (DHIBM-1).

Under the revised plan, the contemplated platform will be moved 4 km to the west to incorporate the Hibiscus resources. Ruche phase 1 will in its revised form consist of four Hibiscus production wells and two Ruche wells, all from the Gamba formation. Phase 2 of the Ruche development will develop the additional proven resources through up to 7 wells to maintain the production plateau.

The change in development plan will not affect expected timing of first oil from Ruche.

Carl K. Arnet, CEO of BW Energy, said: “Hibiscus is proving to be a discovery of equal quality and magnitude to the Tortue field. The revised development will add significantly to our production capacity and take us above the FPSOs current nameplate of 40,000 bbls/day. We are confident that the license partners will support the revised development plan launched by BW Energy.”

 

Capex increased 

 

The estimated capex for the revised Ruche phase 1 incorporating the Hibiscus development has been increased to $445 million (gross) from the original estimate of $375 million. The estimated incremental reserves produced by Ruche phase 1 are 50 million bbls gross (management estimate). Total field operating costs including Ruche phase 1 are estimated to be USD ~10/bbls excluding royalties and taxes at current FPSO nameplate capacity.

BW Offshore has received updated reserve report from independent auditor Netherland, Sewell & Associates Inc. (NSAI) which assess the Hibiscus reserves at 45.4 million barrels of oil (2P) gross. This increases the Dussafu license 1P, 2P and 3P gross 68%, 68% and 69% respectively.

BW Energy is currently drilling four new production wells on Tortue which will be followed by one more exploration well under the current sanctioned development program. This program is expected to result in an average gross production of 16,000 bbls/day in H1 2020 and 23,000 bbls/day in H2 2020. The Tortue field produced gross average of ~11,600 bbls/day in 3Q 2019.

 

Options for two more wells with Borr 

 

BW Energy also said it had agreed options for additional two exploration wells with the drilling contractor Borr Drilling. These wells will, if the options are exercised, extend the current drilling campaign to 3Q 2020.

“We are considering using one or two of these options based on our successes to date and the number of prospects we have identified. We also expect results from ongoing seismic reprocessing by year-end which combined with information from the ongoing drilling campaign will provide valuable data points. I think it is safe to say that the Dussafu development is delivering beyond our initial expectations,” said Carl K. Arnet.

BW Energy expects to finance the Ruche phase 1 development from existing liquidity and cash-flow from operations. The company continues its preparations for a planned listing on the Oslo Stock Exchange.


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