Investors Eye Gas Project As Lagos Oilfield Reserves Rises

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Oil drilling

Investors in Aje oilfield, offshore Lagos, have announced a significant increase in its reserves as well as a confirmation of the viability of the Aje gas development.

Yinka Folawiyo Petroleum Company Limited, a wholly-owned indigenous firm, is the operator of the Oil Mining Lease 113, where the field is located. Other partners are Pan Petroleum Aje Limited (a subsidiary of Panoro Energy), New Age Exploration Nigeria Limited, EER (Colobus) Nigeria Limited, and PR Oil & Gas Nigeria Limited (the holder of MX Oil’s investment in the field).

London-based MX Oil said in a new update that there had been significant developments in the Aje project over the past two years that had had a material impact on the project’s reserves and resource position.

It said since the last Competent Persons Report in July 2014, three new Cenomanian penetrations had been drilled (Aje-5, Aje-5ST1 and Aje-5ST2), with production coming on-stream from the Cenomanian reservoir in May 2016 and from the Turonian oil rim in May 2017.

“A field development plan for the Turonian Aje gas project was submitted to the Nigerian government for consideration in 2017. The FDP comprises four to five production wells in the Turonian, tied back to existing and new infrastructure,” the company said.

According to the updated CPR provided by the AGR TRACS International Limited, an independent reserves auditor, the gross proved reserves at Aje increased to 78.2 million barrels of oil equivalent from 11.7 million boe in 2014; proved and probable reserves rose to 127.1 million boe from  23.4 million boe in 2014, and proved, probable and possible reserves stood at 215 million boe.

MX Oil said, “The level of reserves has increased significantly since the 2014 CPR. These estimates of reserves have been derived based on an oil price assumption of $60/bbl flat real terms and a gas price assumption of $4/Mscf flat real terms.

“The AGR TRACS has also certified gross 1C Unrisked Contingent Resources of four million boe, 2C UCR of nine million boe and 3C UCR of 17.5 million boe.”

The company said the recent performance of the Aje-5ST2 well completed on the Turonian oil rim had encouraged the Aje partnership to consider a more extensive development of the oil rim.

It said since the Aje Gas FDP was completed and submitted ahead of the well coming on line, the AGR TRACS had only been able to recognise contingent resources associated with four horizontal wells proposed as a Phase 2 development in that plan.

The partner said, “The encouraging production performance for the Aje-5ST2 well so far provides a strong incentive for further studies to better understand how the oil rim can be optimally developed.

“These results confirm the commercial quantity of the Aje gas development, highlight the need for a revision to the development plan once the oil rim studies are completed and will underpin a final investment decision on the development of the Turonian reserves in the future.”

Source: Punch

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