Regulatory Filings • Oct 7, 2014
Regulatory Filings
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Panoro and Joint Venture partners Make Final Investment Decision on the OML 113 licence (Aje field) in Nigeria
Panoro Energy ASA ("Panoro" or the "Company") is pleased to announce
that the Company, together with the Joint Venture ("JV") partners, has
taken a Final Investment Decision ("FID") to develop the Aje Cenomanian
oil reservoir in the OML 113 licence in Nigeria. The Aje Field
Development Plan ("FDP") was submitted to Department of Petroleum
Resources ("DPR") earlier this year, and approval to develop Aje as
proposed in the FDP was granted in March 2014.
The FDP is primarily focused on the development of the Cenomanian Oil
reservoir and the first phase of the Cenomanian development ("Phase 1")
includes two subsea production wells tied back to a leased Floating
Production Storage and Offloading vessel ("FPSO"). A contract for the
charter of Rubicon's Front Puffin FPSO has been signed, and
modifications are scheduled to start shortly to bring her into
specification for production on the Aje field. Procurement of subsea
equipment and the contracting of a drilling rig for the Phase 1
development is also ongoing.
As part of Phase 1, the existing Aje-4 well will be re-entered and
completed and a new well Aje-5, will be drilled. The Aje-5 well will be
drilled from a seabed location adjacent to Aje-4 and both wells will be
connected via a subsea manifold and production flowlines to the FPSO.
The Aje-5 well trajectory is designed to intersect the Cenomanian
reservoir close to where the Aje-2 well intersected the Cenomanian
reservoir. This subsurface target has been selected since Aje-2
demonstrated excellent productivity in a Cenomanian production test
conducted in 1997 where it flowed at 3,766 bopd of 41?API oil despite
the well sustaining significant productivity impairment during drilling
operations.
Phase 1 has an estimated funding requirement of $220 million on a 100%
field basis to reach first oil (total funding requirement net to Panoro
is approximately $36 million). Panoro's share of Phase 1 costs are
expected to be funded through the Company's available cash resources.
The Company also has the financial flexibility to source an optimum
level of debt for project development.
In July 2014 an independent review of the project was carried out by AGR
TRACS International Ltd (AGR TRACS). The table below shows the certified
Reserves associated with the Phase 1 development. AGR TRACS also
assesses there to be additional contingent resources within the
Cenomanian reservoir that may be accessed through a second phase of the
development ("Phase 2") comprising two further development wells in the
Cenomanian Oil reservoir. The JV partners envisage moving forward with
Phase 2 once Phase 1 is on production, meaning that Phase 2 capital
expenditure may be funded from Phase 1 production cash flow.
Furthermore the separate Turonian gas reservoir which is rich in
condensate and LPG and which also has a thin oil rim, has been assessed
by AGR TRACS to contain significant additional contingent resources and
is also highlighted in the table. The JV partners will take a decision
to proceed with a development of the Turonian reservoir at a later date.
The Aje Field Cenomanian development decision is a very important
milestone for the OML 113 JV partners in the commercialisation of all
the discovered hydrocarbon resources on the licence. First oil from Aje
is scheduled for the end of Q4 2015 at an initial gross production rate
of around 10,000 bopd based on AGR TRACS estimates.
In conjunction with the ongoing development work, exploration activities
on OML 113 continue with the processing of the newly acquired 3D seismic
data. The final Pre-Stack Depth Migration is scheduled for completion
by end of Q1 2015. It is expected that the new survey will provide a
considerable improvement in data quality over the existing 3D data. It
is envisaged that the data will enable better development planning for
the Phase 2 of development drilling on Aje and provide improved data to
fully evaluate the exploration potential over the whole of the OML 113
licence, including the exciting synrift exploration play that was
significantly de-risked though the discovery made in the neighbouring
OPL 310.
Overview of AGR TRACS Reserves, Contingent Resources and NPV assessment:
+------------------+--------------+------------------+------------+-----
--------+
| |Aje Field |Panoro Net |Panoro Net
|Panoro Net |
| |Gross
|Reserves/Contingen|NPV2($80/bbl|NPV3($100/bbl|
| |Reserves/Resou|t |oil) |oil)
|
| |rces1(mm |Resources1(mmboe) | |
|
| |boe) | | |
|
+------------------+--------------+------------------+------------+-----
--------+
|Cenomanian Proved | 11.73 | 1.75 | $7.0m |
$33.4m |
|Reserves(Phase 1) | | | |
|
+------------------+--------------+------------------+------------+-----
--------+
|Cenomanian Proved | 23.4 | 3.18 | $47.4m |
$67.7m |
|plus | | | |
|
|Probable | | | |
|
|Reserves(Phase | | | |
|
|1) | | | |
|
+------------------+--------------+------------------+------------+-----
--------+
|Cenomanian 2C | 15.73 | 2.04 | $32.7m |
$62.6m |
|Resources | | | |
|
|(unrisked)(Phase | | | |
|
|2) | | | |
|
+------------------+--------------+------------------+------------+-----
--------+
|Cenomanian 2P+2C | 39.13 | 5.21 | $80.1m |
$130.2m |
|(unrisked)(Phase 1| | | |
|
|and | | | |
|
|2) | | | |
|
+------------------+--------------+------------------+------------+-----
--------+
|Turonian 2C | 163.23 | 27.49 | $48.9m |
$99.9m |
|Resources | | | |
|
|(unrisked)(Further| | | |
|
|Phase) | | | |
|
+------------------+--------------+------------------+------------+-----
--------+
|Total Cenomanian | 202.36 | 32.70 | $129.0m |
$230.2m |
|and | | | |
|
|Turonian 2P+2C | | | |
|
|(unrisked) | | | |
|
+------------------+--------------+------------------+------------+-----
--------+
Notes:
1. Calculated at $80/Bbl (and $1.5.Mscf for Turonian case only)
2. $1.5/Mscf gas price for Turonian case only
3. $3.0/Mscf gas price for Turonian case only
Aje is an offshore field located in the western part of Nigeria in the
Dahomey Basin. The field is situated in water depths ranging from 100 to
1,000 meters about 24 km from the coast. Panoro Energy holds a 6.502%
participating interest in OML 113 (with a 12.1913% revenue interest and
16.255% paying interest in the Aje Field). The Aje Field contains
hydrocarbon resources in sandstone reservoirs in three main levels - a
Turonian gas condensate reservoir, a Cenomanian oil reservoir and an
Albian gas condensate reservoir.
For further information, please contact:
Jan Kielland, Chief Executive Officer
Cell: + 47 4156 9974
Email: [email protected]
Nishant Dighe, Chief Operating Officer
Cell: +44 7747807439
Email: [email protected]
Please visit www.panoroenergy.com for more information. Panoro Energy
ASA is listed on the Oslo Stock Exchange (ticker code: "PEN").
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