Byron Energy has obtained an extension of a lease term over the South Marsh Island 71 (SM 71) discovery located in the U.S. Gulf of Mexico.
Byron is the operator of the SM 71 with a 50 percent working interest and 40.625 percent net revenue interest. Otto Energy Limited holds the remaining interest in the lease.
The SM 71 lease was due to expire on July 31, 2017, and Byron had requested a suspension of production (SOP) from the Bureau of Safety and Environmental Enforcement (BSEE).
The extension of the lease term would give Byron time to complete platform construction, install, and hook up new production facilities and lay production pipelines.
The company said that it the SOP request was granted by the BSEE on Tuesday and was effective from August 1, 2017, through November 30, 2017. The approved SOP is based on an activity schedule submitted by Byron.
In accordance with this activity schedule, the company will first complete the platform fabrication, submit an application for a permit to modify the initial completion of SM 71 #1 well, and an application for a permit to drill SM 71 #2 well.
Under the activity schedule, operations for drilling of SM 71 #2 well and completion of SM 71 #1 well are expected to begin before the end of November.
Byron’s CEO, Maynard Smith, said: “We are very pleased to receive the SOP. This will now allow us to complete the development of our SM 71 oil a project, including the drilling of SM 71 #2 well, with production and cash flow expected to commence in January 2018.”
Managing director of Otto Energy, Matthew Allen, added: “This regulatory approval is another important step in the process toward drilling in late 2017 and production from SM 71 in January 2018. Otto is particularly excited at the prospect of drilling the SM 71#2 well given the exploration upside observed in the B65 interval which has potential to double the current field size of 2.2 MMboe of 2P Reserves net to Otto.”