Tag: offshore

Energean and Chariot Limited partner on natural gas project offshore Morocco

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Energean plc has announced it has farmed into Chariot Limited’s acreage offshore Morocco, which includes the 18 Bcm (gross) Anchois gas development and significant exploration prospectivity.

Highlights:

  • New country entry in Energean’s core Mediterranean region with acreage underpinned by an attractive gas development.
  • Farm in to 45% of the Lixus licence, with the option to increase to 55% post drilling results, and 37.5% of the Rissana licence and assumes operatorship of both licences.
  • Includes the commercial 18 Bcm (gross) Anchois development, located near to infrastructure for supply of gas to domestic and international markets.
  • Up front cash consideration of US$10 million.
  • Appraisal well planned for 2024, targeting an additional 11 Bcm of gross unrisked prospective resource to be commercialised through the Anchois development.
  • Energean to carry Chariot for its share of pre-FID costs, which are recoverable from Chariot’s future revenues.
  • Significant additional near-field, near-infrastructure prospectivity that is expected to add attractive, balanced-risk growth potential.

Dr Leila Benali, Minister of Energy Transition and Sustainable Development, commented: “This agreement is pivotal for the wider acreage offshore Morocco, on its Atlantic coast, a key energy asset for the Kingdom. We welcome Energean on these licences as the important investments will contribute
greatly to the monetisation of the country’s resources and to our ambitious energy strategy.”

Mrs Amina Benkhadra, General Director of the National Office of Hydrocarbons and Mines, commented: “I would like to congratulate both parties on signing this agreement. The discovery and extensive work to
date has set an excellent foundation on which the project can be developed and this partnership will now be instrumental in financing and taking it through the next phase. We look forward to working alongside Energean and Chariot in bringing the project to first gas.”

Mathios Rigas, Chief Executive Officer of Energean, commented: “This is an exciting step in the next stage of our development, one that can only enhance our position as the pre-eminent independent natural gas producer listed in London. These assets are particularly attractive as we understand the core geological, commercial and political drivers of the region, we have a track record in developing material gas resources prioritised for the domestic market and they are a complementary fit with our broader portfolio, not least the potential for surplus supply to other markets. We look forward to
working with our partners Chariot and ONHYM, and developing an outstanding resource for the benefit of all parties, including Morocco and its people.”

Adonis Pouroulis, Chief Executive Officer of Chariot, commented: “In Energean, we have secured a partner with a proven track record of rapidly building and delivering this kind of offshore development. Energean also shares our view that Anchois and its surrounding acreage offers significant upside potential and we are aligned with our plans moving forward. The new partnership
is a key step in bringing the development of the Anchois field to reality and we are looking forward to continuing the extensive work undertaken so far to reach final investment decision.”

Assets

Energean has agreed to farm into a 45% working interest in the Lixus offshore licence, which contains the Anchois gas development (Chariot 30%, ONHYM 25%), and a 37.5% working interest in the Rissana licence (Chariot 37.5%, ONHYM 25%). Energean will assume operatorship for both licences.

Farm in terms

As consideration for the interests in the licences, Energean has agreed to the following terms:

  • US$10 million cash consideration on closing of the transaction.
  • Energean agrees to carry Chariot for its share of pre-FID costs, up to a gross expenditure cap of US$85 million, covering:
  1. drilling of the appraisal well, and all other pre-FID costs, and up to US$7 million of seismic expenditure on the Rissana licence.
  • US $15 million in cash, which is contingent on FID being taken on the Anchois Development.

Post appraisal well option to increase working interest from 45% to 55%

Following the drilling of the appraisal well, Energean has the option to increase its working interest in the Lixus licence (which includes the Anchois development) by 10%, to 55%. On exercise of this option, the
amount payable would be:

  • Chariot’s choice between either:
  1. 5-year, US$50 million of convertible loan notes with a £20 strike price and 0% coupon; or 3 million Energean plc shares, issued immediately upon exercise of the option but subject to a lock-up period until the earlier of first gas and 3 years post FID.
  • Energean will pay to Chariot a 7% royalty for every dollar achieved on gas prices (post transportation costs) in excess of a base hurdle.
  • An agreement to carry Chariot’s 20% share of development costs for the Anchois development with the following terms:
  1. A net expenditure cap of US$170 million.
  2. The carry available for development costs is reduced by costs carried in the pre-FID phase.
  3. All carried amounts are recoverable from 50% of Chariot’s future revenues with interest charged at SOFR + 7%.

If the option is not exercised, subject to FID, the partners agree to progress the Anchois development with an ownership structure of Energean 45%, Chariot 30%, ONHYM 25%. All amounts carried by Energean on behalf of Chariot would be recoverable from Chariot’s future revenues under the same terms as above.

The completion of the transaction is subject to government approval.

Lixus licence and Anchois Development

The Lixus Offshore licence covers an area of approximately 1794 km2 with water depths ranging from the coastline to 850 m. The area has extensive data coverage with legacy 3D seismic data covering approximately 1425 km2 and five exploration wells have been drilled historically, including the Anchois-1
and Anchois-2 discovery wells.
Chariot’s latest competent persons report covering the Anchois Field has certified gross 2C contingent resources of 18 Bcm in the discovered gas sands and gross unrisked prospective resources of 21 Bcm in undrilled sands.

Energean and Chariot plan to drill an appraisal well in 2024, with the following objectives:

  • To undertake a drill stem test on the main gas-containing sands.
  • To target an additional 5 Bcm of recoverable gas with a 61% geological chance of success through a sidetrack into the O sands in the Anchois Footwall prospect.
  • To target an additional 6 Bcm of recoverable gas with a 49% geological chance of success through a deepening of the well into previously undrilled sands in the Anchois North Flank prospect.

Once drilled, the well is expected to be retained as a future producer for the Anchois development.

It is anticipated that the licence contains significant additional prospectivity that could allow for further balanced-risk, near-field exploration activity.

Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/08122023/energean-and-chariot-limited-partner-on-natural-gas-project-offshore-morocco/



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CGX and Frontera make discoveries offshore Guyana

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CGX Energy Inc. and Frontera Energy Corporation, the majority shareholder of CGX and joint venture partner of CGX in the Petroleum Prospecting License for the Corentyne block offshore Guyana, have announced the discovery of a total of 114 ft (35 m) of net pay at the Wei-1 well on the Corentyne block, approximately 200 km offshore from Georgetown, Guyana.

The joint venture believes that the rock quality discovered in the Maastrichtian horizon in the Wei-1 well is analogous to that reported in the Liza Discovery on Stabroek block.

Results further demonstrate the potential for a standalone shallow oil resource development across the Corentyne block. The Joint Venture has discovered
total net pay of 342 ft (104 m) to date on the Corentyne block.

The joint venture has also announced that Houlihan Lokey, a global investment bank and capital markets expert, is supporting active pursuit of strategic options for the Corentyne block, including a potential farm down, as it seeks to develop this oil investment in one of the most attractive oil and gas destinations in the world today, Guyana. There can be no guarantee that the review of strategic options will result in a transaction.

Gabriel de Alba, Chairman of Frontera’s Board of Directors, and Co-Chairman of CGX’s Board of Directors, commented: “On behalf of the Joint Venture, I am pleased to announce the discovery of 114 ft (35 m) of net pay at the
Wei-1 well. The proven presence of medium sweet crude oil in high-quality Maastrichtian cored reservoir at the Wei-1 well, combined with the previous discovery of 68 feet of hydrocarbon log pay in Maastrichtian blocky
sands in the Kawa-1 well in 2022, confirmed the significant potential of the Corentyne block. With the joint venture’s two-well drilling programme now complete, and as a result of inbound expressions of interest from
various global third parties, the joint venture is working with Houlihan Lokey to support a review of strategic options for the Corentyne block, including a potential farm down, as it progresses its efforts to maximise value
from its potentially transformational investments in Guyana.”

Orlando Cabrales, Chief Executive Officer of Frontera, commented: “The independent lab results from the Wei-1 well are particularly encouraging for the Maastrichtian zone. Results indicate that the rock quality in the Maastrichtian at Wei-1 is analogous to that reported in the Liza discovery on Stabroek block, further demonstrating the potential for a standalone shallow oil resource
development across the entire Corentyne block. In addition, the joint venture believes that, further potential upside exists in the Campanian, in which mobile light oil was proven in downhole analysis of samples and the Santonian, which has log pay and remains a potential target for future developments. As is normal course, following discoveries such as those made by the joint venture at Wei and Kawa, additional appraisal activities will be required to further assess commerciality and as input to optimise subsurface and production system
development planning.”

Professor Suresh Narine, Executive Co-Chairman of CGX’s Board of Directors, commented: “These are exciting times for the joint venture. The Wei-1 well met the joint venture’s expectations with the successful discovery of oil. Wei-1 also delivered a tremendous amount of data, which the joint venture is now
incorporating into its geologic and geophysical models to update its initial evaluation of Kawa, and the potential in the Maastrichtian in particular, as well as its view of the potential of the remaining undrilled prospects including the prospective areas in between the Wei-1 and Kawa-1 wells. Armed with this information, the joint venture is levering Houlihan Lokey’s extensive expertise in the global O&G sector to complete a strategic review of options for the Corentyne block in one of the most exciting exploration basins in the world.”

Wei-1 results

The Wei-1 well, located approximately 14 km northwest of the joint venture’s previous Kawa-1 discovery, was safely drilled by the NobleCorp Discoverer semi-submersible mobile drilling unit in water depth of approximately 1912 f (583 m) to a total depth of 20 450 ft (6233 m). The Wei-1 well targeted Maastrichtian, Campanian and Santonian aged stacked sands within channel and fan complexes in the northern section of the Corentyne block. As reported on 28 June 2023, the joint venture’s data acquisition programme at the Wei-1 well included wireline logging, MDT fluid samples and sidewall coring throughout the various intervals. Based on this data acquisition programme and additional information provided through the independent laboratory analysis process, the joint venture is pleased to report the following:

  • In the Maastrichtian, Wei-1 test results confirm 13 ft (4 m) of net pay in high quality sandstone reservoir with rock quality consistent with that reported in the Liza discovery on Stabroek block. Fluid samples retrieved from the Maastrichtian and log analysis confirm the presence of sweet medium crude oil with a gas-oil ratio (GOR) of approximate 400 ft3/bbl.
  • In the Campanian, petrophysical analysis confirms 61 ft (19 m) of net pay almost completely contained in one contiguous sand body with good porosity and moveable oil. Oil sampled during MDT testing as well as samples analysed downhole confirm the presence of light crude oil.
  • In the Santonian, petrophysical analysis confirms 40 ft (12 m) of net pay in blocky sands with indications of oil in core samples.
  • Current interpretation of the Campanian and Santonian horizons show lower permeability than the high-quality Maastrichtian, the joint venture believes these horizons may offer additional upside potential in the future.

There were no safety or environmental incidents throughout Wei-1 well operations.

Total costs associated for the Wei-1 well are now estimated to be within US$185 – US$190 million following the successful implementation of several initiatives. Following the agreement reached between CGX and Frontera,
the company will transfer up to 4.7% of its participating interest in the Corentyne block in exchange for Frontera’s funding CGX’s unexpected additional costs associated with the Wei-1 well, which amount to
approximately US$16.5 million. If the maximum transfer occurs, the company will retain a 27.3% participating interest, while Frontera will hold a 72.7% participating interest in the Corentyne block. It is anticipated that this
transaction will be completed during December 2023.

Conceptual field development planning completed

Based on results from the Wei-1 and Kawa-1 wells, the joint venture retained SIA, a Subsea 7 – Schlumberger Joint Venture, to complete a conceptual field development plan for the northern portion of the Corentyne block including subsea architecture, development well planning, production and export facilities and other considerations. As is normal course following discoveries such as those made by the Joint Venture at Wei-1 and Kawa-1 wells, additional appraisal activities will be required before commerciality can be determined.

While such additional appraisal activities will be necessary, as a result of the third-party analysis of the Wei-1 well test results, the joint venture believes that a potential development of the Maastrichtian horizon may have lower
associated development costs and be completed on a faster timeline than a broader development of both the shallow and deep zones on the entire Corentyne block.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/13112023/cgx-and-frontera-make-discoveries-offshore-guyana/



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