Valeura Energy Inc. (TSX:VLE, OTCQX:VLERF), the upstream oil and gas company with assets in the Gulf of Thailand and the Thrace Basin of Turkey, has announced the results of two appraisal wells drilled at the Wassana oil field and to provide an update on plans for restart of production operations.
Highlights
· Two appraisal wells were successfully drilled on flanks of Wassana oil field targeting deeper portions of reservoir;
· Wells A28 and A28-ST1 confirmed net oil pay of 72 ft and 75 ft respectively and were successful in confirming presence of oil deeper than previously proven;
· Valeura is currently re-mapping Wassana to integrate the new data and anticipates that the results will yield an increase in its volumetric estimates and could yield an additional approximately 20 production well locations; and
· On the strength of these results, the Company has commenced a review of development options to expand the production infrastructure which could increase production and extend the field life beyond 2030.
Appraisal wells
Valeura Energy has drilled two appraisal wells on the flanks of the Wassana oil field to test for suspected additional oil accumulations in the field’s Tertiary clastic section. Both wells targeted the deeper portions of the reservoir section (2.0 and 2.1 sands), which holds most of the remaining underdeveloped oil reservoirs in the field. The appraisal programme was driven by the fact that an oil-water contact in this section had not yet been penetrated, implying potential for additional down-dip oil volumes. Further, recently reprocessed 3D seismic data suggested upside in a thickening of the reservoir section in the targeted locations. Both wells were successful in fulfilling these objectives and the Company believes the well results indicate the potential for substantial further development of the field which could yield an increase in production and a significant extension of the field’s economic life.
The first well, A28, was drilled in the main producing fault block of the field, downdip of existing production wells and encountered 72 ft of net oil pay. While previous reserves estimates were based on a demonstrated oil-down-to depth of 5,517 ft true vertical depth sub-sea (“TVDSS”), the new well has confirmed the presence of oil down to at least 5,594 ft TVDSS, exceeding the Company’s expectations for the vertical extent of the oil column. In addition, the well encountered a thicker package of reservoir sands and new oil-filled sands that have not been previously developed.
The second well, A28-ST1, was drilled to confirm the presence of oil in an untested area south of the main producing part of the field. The well encountered 75 ft of net oil pay proving the presence of oil in this undeveloped area.
Valeura is currently re-mapping the field to integrate the new data and anticipates that the results will yield an increase in its volumetric estimates. These additional volumes will be assessed as part of the Company’s next external third-party reserves and resources evaluation. Preliminary analysis indicates that an additional approximately 20 production well targets are now potentially viable within the reservoir section appraised by these two wells. In light of this upside potential, Valeura has begun the concept selection phase of a project to expand the development of the Wassana field. The Company envisages this will involve deploying additional wellhead and oil processing structures to be used as a higher-capacity production hub than is currently available through the existing mobile production facility.
The drill rig has since mobilised to the Jasmine oil field where it is commencing a four well drilling programme comprising two production wells and two appraisal wells to support additional production well drilling in 2024. After the programme at Jasmine, the rig is scheduled return to the Nong Yao oil field for a five well infill drilling campaign.
Wassana Field production update
In July 2023, Valeura suspended production operations at the Wassana field in order to undertake a review of safety and operating practices of the field’s third-party-owned and operated floating storage and offloading vessel (“FSO”). As a result of this review, Valeura and the FSO’s third-party owner have opted to select a new sub-contractor to operate the FSO going forward and are working together to formalise the engagement. The Company intends to implement a phased transition plan resulting in production resuming in Q4 2023.
Sean Guest, Valeura Energy President and CEO commented:
“This is an excellent outcome for the Wassana field and a demonstration of our team’s ability to uncover further value-adding subsurface opportunities. As a result of a thorough review of the asset, we are now facing several opportunities to increase the scale of the Wassana field, and see the potential for further reserves development, increased production, and an extension of the field’s economic life well into the 2030’s.
Wassana is shaping up to deliver much more than its original expectations, a characteristic which is consistent with the ultimate recovery we are achieving at our other fields in the Gulf of Thailand.
We are also making good strides toward resuming production operations at the field, which prior to the suspension, accounted for approximately 10% of our total aggregate production. We look forward to re-starting under conditions that fit with our high standards for health, safety, and environmental responsibility.”
