Oil and gas company Ophir Energy has sanctioned the fourth phase of the Bualuang field development in the Gulf of Thailand.
Ahead of its annual general meeting on Wednesday, Ophir said that a Final Investment Decision (FID) has been taken to start the fourth phase of the Bualuang development with a total investment forecast to be $145 million from now until 2020.
It is expected to deliver NAV growth of upwards of $50 million (NPV10) representing an unlevered IRR of 40+%, the company said.
The development will consist of a 12 slot bridge-linked wellhead structure with additional power generation. It will include the drilling of up to 14 wells and an expansion of the water disposal capacity on the Bravo platform.
ERC Equipoise forecast that the development will convert 9.2mmbo of contingent resources to reserves. First oil expected in the second half of 2018.
The Vantage Drilling-owned Topaz Driller jack-up rig is on location at the Bualuang field and has started operations on the 2017 infill drilling program. This program consists of two development wells and one well targeting untested prospective resources in a near-field step-out location.
Abandoned well stock is to be recycled to target the three new locations with the goal of the development wells growing production by around 1,400 bopd. The cost of these development wells will be c. $12 million and is expected to add $23 million to the NPV of the project and payback within 12 months. Production year to date from the field is averaging 8,100 bopd.
Nick Cooper, CEO of Ophir Energy commented: “Bualuang is a reliable, low cost, cash generative asset. Phase 4 is a great opportunity to grow NAV per share through the monetization of additional resource with quick paybacks and a healthy IRR.”
The Bualuang field has been on-stream since 2008. It is 100% owned by Ophir. The field was initially thought to contain 15 mmbl of 2P reserves and have a productive life of approximately five years. However, the field has undergone numerous reserve upgrades, and by October 2015, it hit its 25 millionth barrel.