Energy: This explorer has started on the road towards oil production
Link copied to
FAR Limited (ASX:FAR) and its joint venture partners, which include operator Woodside Petroleum (ASX:WPL), have given the green light to developing their Sangomar oil field offshore Senegal.
The first phase is expected to produce a total of 231 million barrels (MMbbl) of oil from 2023 through a series of 23 subsea wells tied to a floating production, storage and offloading facility.
Sangomar has current proved and probable reserves of 231MMbbl of oil and a further resource of 253MMbbl that is contingent on further development drilling and installation of additional subsea infrastructure.
For FAR, the project will transform the company from an explorer to a producer with peak net production of 13,670 barrels of oil per day.
FAR currently has a 15 per cent stake in the project and has secured a $US300m facility with Macquarie Bank, BNP Paribas and Glencore.
The company is No.2 on Credit Suisse’s list of ASX-listed companies tipped to make big gains this year.
The projected gain is 138 per cent as the junior oil play sets about securing financing for its share of the Sangomar oil development.
In Texas, Otto Energy (ASX:OEL) has every reason to feel energised after its operating partner increased gas and condensate production from its producing Green #1 well at the Lightning field.
Green #1 is now producing 14.3 million standard cubic feet (MMscf) of gas and over 400 barrels of condensate per day, up from the previous 11.9MMscf of gas and 360 barrels of condensate per day.
This comes after operator Hilcorp Energy increased the choke – the device which controls how much gas is produced – on the well after observing minimal downhole drawdown during drilling of the Green #2ST well.
Not a bad result at all, and one that could be increased further.
There is potential to increase production to the current sales tap limit of 16MMscf of gas if the rate and pressure stabilises at the current level.
Meanwhile, Hilcorp is expected to carry out more perforations on the Green #2ST well before bringing it into production in February.
It will also increase the sales tap limit to about 36MMscf per day as part of facility upgrades that are occurring at the same time.
Should production testing of Green #2ST be successful, the joint venture will consider the potential for additional wells at the Lightning field.
Otto has a 35 per cent interest in the Lightning field.