LGO Energy hails higher oil flow from second Trinidad well

Production has begun at LGO Energy's second well in the Goudron Field in Trinidad at a rate that suggests the company will be able to substantially increase production over the coming year.

The well flowed freely without pumping at an initial rate of 80 barrels of oil per day since it was completed on 9 April.

The AIM-listed company said it expected the GY-683 well would pump at an initial stabilised rate estimated to be approximately 65 bopd, once the natural flow period has ended.

LGO said the well contributed to its increasing revenue, as production rose amid improving oil prices, with oil production adding incremental operational expenditure of roughly $2 per barrel.

GY-683 is the second out of up to 10 wells planned for 2017 and early 2018, with each forecast to generate an average initial pumped production rates of 45 bopd of light sweet crude, and the oilfield having consistently demonstrated declines of less than 20% per year at the 100-plus existing wells in the same Mayaro Sandstone.

LGO has approvals in place for three more wells and said it was "currently evaluating the necessary drilling contracts" before embarking on the next three to five wells.

Chief operating officer Fergus Jenkins said the well's initial flow rate was ahead of the average expected, "giving confidence that the new drilling campaign is on track to substantially increase production from Goudron over the year".

"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."