By Stewart Dalby
A year ago the managers of LGO Energy, which was then called Leni Gas & Oil, talked about production from Trinidad, and in particular from the flagship Goudron field, reaching 2000 bopd. But it seemed more like a wistful dream rather than a meaningful target. LGO had been picking the low lying fruit by drilling makeovers in shallow zones in old discoveries and was producing somewhere between 300 and 400 bopd.
On January 6, however, LGO announced that 10 day average production from Goudron exceeded 2000 bopd since December 23 and average group production was 1,685 bopd over the whole of December. The impressive rate was driven by average output of 1,045 bopd from one well, GY-670, which continues to produce at a highly restricted flow rate. The well is on a 10/32 inch choke to ensure longer term production potential is maximized although the management estimate that the calculated open-hole flow rate could in excess of 6,000 bopd.
Well GY-671, the seventh in the current programme was perforated over a 171 feet interval of oil bearing C-sands on December 17 and flowed at a restricted rate 216 bopd on a restricted choke. Again wellhead pressure was high at 900psi.Well G-669, the eighth in the programme is being prepared for completion and is expected to be on production imminently. Applications for the next two drill sites, Pad-4 and Pad-5 have also been lodged with the Trinidadian authorities and site preparation will start soon.
All in all it appears production seems certain to rise further. The programme of these development wells is a big step up the ladder for LGO CEO Neil Ritson and his team and a vindication of their policy of drilling in deeper zones as well as shallow ones.
Commenting on the 2000 bopd production milestone Ritson said: “The 2014 work programme and especially the GY-670 well has been truly transformational for LGO with a 5-fold increase in sustainable daily group production. As we move into the 2015 drilling programme we have high hopes of continuing the success we have seen in the past year. The low cost of our operations ensures they are sustainable at low oil prices and we have no plans to decrease the extent of our work programme at Goudron.
While production may have increased 5-fold the share price has not done so badly either. The collapse in oil prices has impacted on LGO as it has with many other small cap concerns. The shares at 3.40p are off the 52 week high of 6p, but even so they are a long way north of of the low of 0.64p, more than 5 fold more, in fact.