By Stewart Dalby
LGO Energy, which used to be called Leni Gas & Oil, intends to contiinue along the path it set out on in 2014 by drilling, in the new 2015 campaign, more wells into the deeper zones on its acreage in Trinidad. It has recently announced that well GY-672 spudded on April 15 has been successful.
A year ago the company 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 this year, however, London AIM-listed LGO announced that 10 day average production from Goudron exceeded 2000 bopd since December 23. It now says that group production was 1,550 bopd for Q1 2015 and that field production rate is anticipated to rise to over 2,000 bopd on a steady basis once the wells currently being drilled are placed in production.
LGO drilled eight new appraisal and production wells in the 2014 drilling programme (as opposed to makeovers and infills) as part of an overall 30 well campaign on Goudron. The thinking was that by drilling down beyond the shallow Goudron Sands zone, from whence production had previously sprung, to deeper zones like the Lower Cruze, output could perhaps increase from, say, 60 bopd a day to 600 bopd. The thinking proved to be correct.
Commenting on the 2014 bopd production milestone CEO Neil Ritson said: “The 2014 work programme and especially the GY-670 well have 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.”
The G-672 well is the first of the seven well programme in 2015 being drilled from pads 4 & 5. The Goudron Sandstone was encountered between 1,100 and 1,700 feet measured depth (MD) with an estimated net oil pay totalling 336 feet. The oil and gas bearing C-sand interval was encountered at a depth of 2,460 feet MD and net hydrocarbon bearing pay in the C-sand interval has been provisionally estimated at 160 feet.
The company feels it is significant the G-672 well was drilled, logged and cased for future production in under 15 days, some 10 days less than any well in the eight well programme carried out in 2014. LGO says: “The employment of logging while drilling (LWD) has proved to be highly effective. This improved performance is expected to have significant cost benefits in the programme as a whole”.
As previously announced that ten additional wells are now being planned and more drilling pads will be constructed so as to allow for an on-going drilling sequence.
As for other drilling, the first of the planned twelve recompletions announced on April 15 2014 have now been completed and the well is on pump production and is currently cleaning up. Further wells will be recompleted during May and these recompletions are expected to provide additional production at low cost.
Thus LGO probably looks forward to another significant uplift in output at a lower unit cost at a time when prices uncertain. Nice work. The share price at 2.50p are holding well at 2.50p since they have been as low as 1.05p in the past year. But they have been higher at 6p and could gain ground as production builds.