LGO Energy confirms production at another well

LGO Energy announced on Tuesday that its second development well, GY-683, in the new drilling campaign on the company's Goudron Field, which was drilled to a total depth of 1,250 feet measured depth and perforated over a 269-foot interval of net oil pay within the Mayaro Sandstone reservoir, was now on production.

The AIM-traded firm said the well was completed on 9 April and was now free flowing - i.e. without pumping - with an initial rate of 80 barrels of oil per day of dry oil with API gravity of approximately 44 degrees and initial well-head flowing pressure of 40 psi through a 7/64-inch choke.

It was anticipated that once the natural flow period ends, the well will be placed on pump at an initial stabilised rate estimated to be approximately 65 bopd.

“As with the first well GY-682, this second well has come in ahead of the average expected for initial production rate, giving confidence that the new drilling campaign is on track to substantially increase production from Goudron over the year,” said chief operating officer Fergus Jenkins.

“The initial free flowing dry oil nature of the well suggests a high quality reservoir and higher than anticipated inflow rates which is a very positive outcome.”

GY-683 was the second of a programme of up to 10 infill wells planned for the Mayaro Sandstone in 2017 and early 2018.

Each well was forecast to have average initial pumped production rates of 45 bopd of light sweet crude, with the field historically demonstrating low decline rates consistently less than 20% per annum, as evidenced in over 100 existing wells at Mayaro Sandstone level, the board explained.

The company currently had approvals in place for the next three wells in the campaign and was evaluating the necessary drilling contracts prior to embarking on the next three to five wells in the planned programme.

With improved oil prices and rising production, on which incremental opex was approximately $2 per barrel, the company said it was continuing to increase its revenue generation.