Offshore exploration company Hyperdynamics which recently failed to strike oil at its Fatala-1 well offshore Guinea, believes there’s still value to be found below the country’s seabed.
The company on Thursday said it notified the government of the Republic of Guinea that it would be seeking a two-year appraisal period under its oil and gas Production Sharing Contract.
“Based on further analysis of the results of the recently drilled Fatala-1 exploration well regarding the oil saturation calculation — plus our internal review and the log analysis conducted by eSeis, an independent geophysical and petrophysical consultant — we believe we have made a petroleum discovery that implies the presence of commercially exploitable resources as specifically defined in our Production Sharing Contract,” said Ray Leonard, Hyperdynamics’ President and Chief Executive Officer. “As a result, we are requesting a two-year appraisal period from the Government of Guinea.
“We will be developing an appraisal work program and budget that we intend to present and discuss at an Oil and Gas Operations Management Committee meeting with the Guinea Petroleum Directorate that we have proposed at the end of October,” he added.
While Hyperdynamics is seeking more time for potential future work offshore Guinea, it will be continuing alone – at least for now- as its current 50% partner, South Atlantic Petroleum Ltd., notified the Company that it will not apply for an appraisal period extension and will withdraw from the Joint Operating Agreement (JOA) and the PSC and will assign its 50% interest to Hyperdynamics free of cost.
“SAPETRO remains liable for its share of obligations relating the PSC and the JOA through the withdrawal, but not for expenditures relating to the appraisal program. Hyperdynamics will be 100% interest holder and will look for partners to share risks and costs,” Hyperdynamics said.
“We remain committed to seeking to create value for our investors,” Leonard said. “While SAPETRO has decided not to continue exploring with us in Guinea, we want the opportunity to appraise the Fatala prospect area to determine whether or not it is commercial.”
Hyperdynamics earlier reported that the well did not yield oil shows above oil-based mud signature during drilling or from an analysis of the cuttings taken from the well. Additionally, the primary target of its exploration – a 75-meter-thick channel – did not contain reservoir-quality sand.
However, further detailed study of the well logs identified five meters of calculated hydrocarbons in the upper Cenomanian channel (Cenomanian 03) located above the primary target formation. The five-meter sand has an average porosity of 17% and a hydrocarbon saturation of 61%. A minor background gas increase was also observed while drilling through this interval. The well was drilled on the edge of this channel, and the well result will be integrated with the seismic data to determine the commercial potential of this zone, the company said.
Offshore Energy Today Staff