Drilling operations update
28 February 2011
Bowleven plc ('Bowleven' or 'the Company')
Drilling operations update
Sapele drilling operations, Block MLHP-5, Etinde Permit, Offshore Cameroon
Bowleven, the West Africa focused oil and gas exploration group traded on AIM, is pleased to announce that drilling has commenced on the Sapele-1 sidetrack (Sapele-1ST), Douala Basin, offshore Cameroon with the Noble Tommy Craighead jack-up rig.
The principal objective of Sapele-1ST is to appraise the Deep Omicron oil discovery encountered in the Sapele-1 exploration well. The well is to be drilled to an estimated vertical depth of circa 3,682 metres (4,761 metres measured depth) approximately 2 kilometres South East from the Deep Omicron oil discovery in the original vertical well. Drilling is expected to take approximately 40 to 50 days (excluding testing).
The Vantage Sapphire jack-up rig has now been contracted and consequently the Sapele-2 well is expected to spud mid March 2011 as a material step-out down dip from the Sapele-1 location.
Further update announcements on drilling activities will be made as appropriate.
Bowleven will announce its interim results for the six months to 31 December 2010 on 28 March 2011.
ENQUIRIES
For further information please contact:
Bowleven plc
Kevin Hart, Chief Executive 00 44 131 524 5678
Kerry Crawford, Head of Investor Relations 00 44 131 524 5678
Brunswick Group LLP
Patrick Handley 00 44 207 404 5959
Natalia Erikssen
RBS Hoare Govett
Stephen Bowler 00 44 207 678 8000
Jamie Buckland 00 44 207 678 8000
Notes to the Editor:
Bowleven is a West Africa focused oil and gas exploration group, based in Edinburgh and traded on AIM since December 2004.
On 12 August 2009, Bowleven entered into a farm-out agreement with Vitol E&P Limited (Vitol) in respect of the Etinde Permit (Etinde) Cameroon, comprising three shallow water blocks in offshore Cameroon, West Africa; namely Blocks MLHP-5, MLHP-6 and MLHP-7. As a consequence, Vitol acquired an initial 25% participating interest in Etinde, in return for funding a $100 million gross work programme and Bowleven retained its 75% operated participating interest in the Etinde Permit. Bowleven holds its interest in Etinde through its wholly owned subsidiary EurOil Limited. The original agreement also included an option for Vitol to acquire a further participating interest.
On 30 September 2010, a revised option arrangement was agreed with Vitol. Under this agreement, Vitol have an option to acquire a 10% participating interest in block MLHP-7, Etinde, in return for funding an agreed $50 million gross appraisal work programme. The option expires on the earlier of (i) the spud date of the next appraisal well on block MLHP-7 and (ii) 31 March 2011. The option arrangement excludes blocks MLHP-5 and MLHP-6, Etinde, where the Sapele-1 exploration well is currently being drilled. Bowleven will retain operatorship of all three blocks.
Under the production sharing contract (PSC), the state of Cameroon has the right to elect to take a 20% participating interest in development activity on the acreage. In the event that this back-in right is exercised, Bowleven and Vitol have agreed that they shall correspondingly reduce their participating interests in any future development on a pro rata basis.
The Etinde Permit comprises approximately 2,316 km² of exploration acreage located across the Rio del Rey and Douala Basins in the Etinde Permit. The exploration period for the Etinde Permit expires at the end of 2011. There is explicit provision in the PSC for a one year extension to complete appraisal activity. Since 2007, the Bowleven group has drilled five wells on the Permit, all of which have been successful. Drilling operations are ongoing on a multi well drilling programme on the Etinde Permit. The IE-3 appraisal well, the first well in the campaign, was drilled to a final depth of 3,048 metres and a testing programme of five DSTs (drill stem tests) was successfully completed. The second well in the campaign, the high potential Sapele-1 exploration well on block MLHP-5, Etinde Permit, Cameroon targeted a series of vertically stacked reservoir objectives, from the proven Tertiary fairway down to the deeper Cretaceous fairway. All five target objectives have indicated to be hydrocarbon bearing from log evaluation with net pay confirmed in three post sampling. Further details on Sapele-1 drilling results were also provided in announcements made on 9 and 25 November 2010 and 10 January 2011. The well was drilled to a TD of 4,733 metres before drilling was halted due to technical limitations after encountering a high pressure gas reservoir in the Cretaceous. Based on an initial analysis of the major step change in pressure encountered and the interpretation of the seismic, it is considered that the well may have encountered a significant hydrocarbon column in the Cretaceous. The bottom hole section was cemented and abandoned in advance of sidetracking activity. On 28 February 2011 it was announced that drilling has commenced on the Sapele-1 sidetrack (Sapele-1ST). The principal objective of Sapele-1ST is to appraise the Deep Omicron oil discovery encountered in the Sapele-1 exploration well. The well is to be drilled to an estimated vertical depth of circa 3,682 metres (4,761 metres measured depth) approximately 2 kilometres from the Deep Omicron oil discovery in the original vertical well.
The drilling rig contract signed for the Etinde drilling programme is for the Noble Tommy Craighead jack-up, owned by Noble International, a subsidiary of Noble Corporation (NYSE:NE).
The contract signed for the second drilling rig assigned to the Etinde drilling programme is for the Sapphire Driller jack-up, owned by Sapphire Driller Company, a subsidiary of Vantage Drilling Company (NYSE: VTG). The Sapele-2 well will be drilled with this rig and is expected to spud mid March 2011 as a material step-out down dip from the Sapele-1 location.
EurOil Limited also has a 100% equity interest in the Bomono Permit, onshore Cameroon, extending to approximately 2,328 km² in the Douala Basin.
Bowleven holds, through its wholly owned subsidiary FirstAfrica Oil Limited, a 100% equity interest in the EOV Permit offshore Gabon, which contains an existing oil discovery that is awaiting development. A sale and purchase agreement has been initialled for the disposal of the Group's entire interest in EOV. Government acknowledgement of the transaction has been requested (although not a legal requirement). Bowleven also has a 50% non-operated equity interest in the Epaemeno Permit, which is approximately 1,340 km² of exploration acreage onshore Gabon. Addax is operator of the Epaemeno Permit. An 18 month extension to the second exploration term has been agreed with the Gabonese authorities, running from the expiry of the original exploration phase through to February 2012.
GLOSSARY OF TERMS:
The following are the main terms and abbreviations used in this announcement:
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AIM |
Alternative Investment Market |
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Bowleven |
Bowleven plc and/or its subsidiaries as appropriate |
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Etinde Permit |
the production sharing contract between the Republic of Cameroon and EurOil Limited (an indirectly wholly owned subsidiary of the Company) dated 22 December 2008 in respect of the area of approximately 2,316 km², comprising former blocks MLHP-5, MLHP-6 and MLHP-7, offshore Cameroon; or, as the context may require, the contract area to which this production sharing contract relates |
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This information is provided by RNS