Oil & gas company Erin Energy expects to more than double its oil production after it completes a pair of wells on the Oyo field located in OML 120, offshore Nigeria.
Erin Energy currently produces approximately 6,000 barrels of oil per day (bopd).
The company, formerly known as CAMAC Energy, said on Monday that drilling operations for the Oyo-9 development well are planned to start next month and be completed by year end, pursuant to the drilling contract with Pacific Drilling.
To recall, earlier this year, Erin hired the sixth generation double-hulled drillship Pacific Bora for the Oyo-9 well under a base operating rate of $195,000 per day. The contract included an option to drill two additional exploration prospects in the prolific Miocene geological zone.
According to the company, the Oyo-9 well alone has the potential to increase Oyo field production by 6,000-7,000 barrels of oil per day, which would double the company’s current output. Coincidental with the completion of Oyo-9, the company will also tie back the Oyo-7 well to its FPSO.
Back in July 2016, the Oyo-7 well was shut-in as a result of an emergency shut-in of the Oyo field production facility. The well was unable to come back online naturally due to high water production and resulted in a temporary loss of approximately 1,400 bopd.
This well should now add approximately 1,200 bopd to the company’s output, Erin said.
Extension for the drillship?
There might be some good news for Pacific Drilling as well as the company is discussing a possible extension to the contract with the driller, depending on availability of funds, to drill one or two wells in the prolific Miocene geological zone located in OML 120.
Femi Ayoade, Erin Energy’s CEO commented, “We are pleased with the progress in our drilling operations and the possibility to more than double the company’s current production. Additionally, we believe our greatest shareholder value creation opportunities are in our Miocene exploration prospects, where we are working to accelerate the drilling in OML 120 and 121. Solid progress is also being made to restructure the company’s debt, including the reduction in our accounts payable.”
Frank C. Ingriselli, Erin Energy’s Chairman commented, “When I was elected to the Board of Directors a few weeks ago, I commented on the world class assets in Erin Energy’s portfolio and our plans to maximize value from those assets and the drilling of these Oyo wells will significantly add value to our portfolio.
“We plan to commence non-deal roadshows as soon as possible to communicate the company’s story and opportunities to Wall Street so that our share price reflects the true value of our company, as we execute on our development and exploration plans to add hundreds of millions of barrels of additional reserves.”
Erin Energy has a 100 percent interest in offshore Oil Mining Leases 120 and 121. The OML 120 contains the Oyo Field which is located some 75 kilometers from the coast in water depths ranging from 200 to 500 meters. The Oyo field started production in December 2009, and the wells are connected to the Armada Perdana FPSO.
Offshore Energy Today Staff