SOCO International plc: Operational update
Wednesday, Feb 13, 2013
- Production net to the Company’s working interest (“WI”) for 2012 averaged 14,757 barrels of oil equivalent per day (“BOEPD”), over 170 % higher than in 2011. WI production averaged 18,825 BOEPD for the month of January 2013. Entitlements production for 2012 averaged 15,496 BOEPD.
- Net cash and liquid investments as at 31 December 2012 was $211.4 million (30 June 2012: $178.0 million and 31 December 2011: $113.5 million).
- An ongoing independent reservoir engineers’ assessment of the Te Giac Trang field in Vietnam currently ascribes an original oil in place range up to 958 million barrels.
- The expiry of the option to sell the Company’s (80%) majority interest in SOCO Cabinda Limited (“SOCO Cabinda”) to the entity’s minority shareholder has been extended to the middle of February 2013. SOCO Cabinda has a 17% participating interest in the Cabinda North Block, onshore the Angolan enclave of Cabinda.
Te Giac Trang Field
The Te Giac Trang (“TGT”) field is a simple structure extending over 13 kilometres and at least five fault blocks. The producing reservoir comprises a complex series of over 50 Clastic reservoir intervals of Miocene and Oligocene age. The field is early in field life and without a directly comparable field analogue.
The TGT field is presently producing from two 16-slot platforms (some of which are designed to handle two wells) with 16 producing wells. First oil production was achieved in August 2011 from the northern platform and the second platform came on stream less than a year later in July 2012. The field continues to perform in line with expectations, with field production ranging 52-55,000 barrels of oil per day (“BOPD”); January 2013 production averaged 54,702 BOPD. Sales of TGT crude currently realise a premium of US$5-$6.50 per barrel to Brent benchmark crude price. Further drilling and appraisal is planned as part of the continuing field development. The 2013 campaign of 3-4 infill wells and the H5 step-out appraisal well is expected to commence in the second quarter of this year.
The Company has retained RPS Energy Consultants Limited (“RPS”), a professional consultancy specialising in petroleum reservoir evaluation and economic analysis, to provide an independent assessment of the field’s Stock Tank Oil Initially In Place (“STOIIP”) and potential recovery factors.
Based on the information available to date, RPS estimates a STOIIP range from 466 to 958 million barrels of oil (“MMBBLs”). Additional undiscovered STOIIP of 53 to 152 MMBBLs are attributed, in particular in the undrilled southernmost fault block, H5, which will be drilled as a step-out appraisal well early in 2013. This independent view confirms the Company’s overall assessment of the TGT field.
From the information available to date and the limited extent of development in each fault block, in particular the number of producing wells and the provision of injection support, RPS take the view that recovery factors range from 28% to 35%. SOCO believes that additional drilling and longer term production will continue to de-risk the field and impact positively on both the total number of reserves and recovery factors, with recovery factors anticipated to achieve 45-50%, as has already been demonstrated in several producing intervals and as is seen in similar producing horizons in other producing fields in the same basin.
The ongoing independent assessment will continue, factoring in new data from the additional wells in 2013 and from the gas sales agreement that is close to finalisation. Thus adjustments to the Company’s published reserves, if any, will be made at year-end 2013.
Ca Ngu Vang Field
Ca Ngu Vang (“CNV”) field is a fractured granitic Basement field, where traditional reservoir properties and STOIIP calculations are not straightforward. The field came on stream in August 2008 and production averaged approximately 9,760 BOEPD in January 2013 (approximately 2,440 BOEPD net to the Company’s working interest).
As has been previously stated, the CNV field requires another well to assess the revised full reserve potential of this field. Although the draft budget includes a CNV-7P well, at this point the Joint Operating Company’s final 2013 Work Programme and Budget remains to be formally approved while amendments to the CNV Full Field Development Plan proceed through the formal Government approval process. Thus, once clarity on this issue has been reached, the review of CNV will be completed.
Option to sell majority interest in SOCO Cabinda Limited (“SOCO Cabinda”) to minority interest holder
As originally announced on 25 September 2012 SOCO entered into a conditional agreement wherein it would sell its 80% majority interest in SOCO Cabinda Limited to the minority shareholder of the company, which holds the remaining 20% interest. SOCO Cabinda has a 17% participating interest in the Cabinda North Block, onshore the Angolan enclave of Cabinda. Under the terms of the agreement, SOCO received a non-refundable deposit for the option to acquire, within 120 days, SOCO’s entire shareholding in SOCO Cabinda.
Earlier this month, SOCO agreed to an approximate three week extension of the option expiry date.
The Company’s preliminary results for the year ended 31 December 2012 will be released on the 11th of March.
Source: SOCO International