Orca Exploration Group has announced the completion of its offshore workover and drilling program on the Songo Songo gas field development offshore Tanzania, and the release of the Paragon M826 drilling workover rig.
The offshore program of the Songo Songo Main Field development program included workovers on three existing wells (SS-5, SS-7 and SS-9) and the drilling of one new development well, SS-12.
Phase 1 of the development program also includes the completion of the SS-12 production platform, flowlines and tie-in facilities connecting SS-12 to the company’s gas processing facilities and a refrigeration system required to ensure field production stability to enable the company to produce wells into the newly built National Natural Gas Infrastructure Project (NNGIP).
Reduction in cost
According to Orca, the total cost of Phase 1 of the development program was originally estimated to $120 million, however, now that the offshore program has been completed, the company says it expects the Phase 1 of the development program to have a total cost of under $80 million with costs incurred to date of approximately $68 million.
The reduction in costs was a result of being able to workover the three wells without having to do any side-tracking, efficiencies achieved during the work-overs, and work scope changes which reduced the original estimated time required to complete Phase 1, the company explained. The full development program provides for additional workovers, compression systems and additional infrastructure to ensure all production commitments are met through to the end of the licence in 2026.
The offshore program was designed to: (i) put safe existing suspended and operating production wells; (ii) restore and increase the current productive capacity of the Songo Songo Main Field to ensure the continued delivery of Protected and Additional gas into the existing Songas infrastructure; and (iii) provide additional operational redundancy and deliverability for future additional gas sales.
Orca stated that the offshore program has increased production capacity from approximately 83 million standard cubic feet per day (MMscfd) prior to the development program to current production capabilities of approximately 150 MMscfd.
Upon completion of the platform for SS-12 and the tie-in to production facilities, production capabilities are expected to be in excess of 185 MMscfd. The field is now capable of both filling the existing Songas infrastructure to capacity of approximately 102 MMscfd, as well as providing additional gas volumes to the NNGIP, Orca noted.
The company says it is currently negotiating terms for the sales agreement to the NNGIP with the Tanzania Production and Development Company (TPDC). Until the agreement is signed, the company’s production is limited by infrastructure and contractual constraints, producing an average of 90 MMscfd for the fourth quarter of 2015 and is expected to average 94 MMscfd in 2016, Orca said.
Orca currently supplies gas primarily for power generation to the Tanzania Electric Supply Company (TANESCO), Songas, and 38 industrial customers in the Dar es Salaam area.
“We are delighted with the success of the Offshore program and the significant cost savings achieved, this reflects the strength of our operation’s team,” said Orca’s Chairman and Chief Executive Officer, David Lyons.
“The development program has enabled the Company to significantly increase production capacity in Tanzania and ensure the continued reliable supply of natural gas to our customers.”
Orca’s Tanzania operations are managed by the company’s wholly owned subsidiary, Pan African Energy Tanzania Limited (PAET), headquartered in Dar es Salaam.
In order to complete the offshore program, the company’s subsidiary, PAET has utilized the $60 million loan facility with International Finance Corporation which was signed on October 29, 2015. The final $40 million drawdown of the loan was received on Friday, February 19, 2016.