ADM Energy commissions new report on Barracuda Field

The AIM-traded firm said the new report would be “the next step” in the agreed scope of work under the risk sharing agreement for the development of the field, in which it holds an indirect interest.

It said the report would provide a full technical and economic review of Barracuda, assessing the latest data to define the asset's geological profile and estimated gross in-place and recoverable oil and gas volumes from oil and gas accumulations located in the NW OML 141 Licence Area, onshore Nigeria.

Xodus would use the Society of Petroleum Engineers (SPE) Petroleum Resource Management System, updated in 2018, for classification of the oil and gas volumes, which would provide more clarity on the classification of resources than the 2007 system.

ADM described the Barracuda Field as an existing discovery located in swamp and shallow waters in Nigeria’s Bayelsa State.

Four wells had been drilled in the field on OML 141, with three in 1967, and the most recent, Barracuda-4, being drilled in 2007.

A competent person’s report prepared for Nobel Hill Network by Ryder Scott in 2016, prior to ADM’s involvement, produced positive results from logs and sidewall cores with hydrocarbon shows supporting an oil discovery at areas identified as the D-1B and C3 levels.

The report indicated P50 estimated prospective gross in place oil volumes of 1.3 billion barrels from two sand reservoir intervals.

ADM said the report was expected to take four to six weeks to complete.

“The new competent person’s report is the springboard for the RSA Consortium's plans to develop the Barracuda Field, and take the asset into production,” said chief executive officer Osamede Okhomina.

“It will validate the appraisal work already conducted by our internal technical team, which has defined immediate recoverable reserves and significant potential beyond.

“We believe that first oil of 4,000 barrels of oil per day may be possible and, subject to rig availability, could be achieved in the second half of 2021 by drilling an appraisal well.”

Okhomina said if that was successful, there could be the opportunity to further increase production to approximately 23,000 barrels of oil per day by drilling six wells by 2026.

“Since finalising the acquisition last month, we have moved swiftly to secure the services of key technical partners and have now officially commissioned Xodus to produce the competent person’s report.

“We are pleased by progress at Barracuda to date and will continue to take a proactive role in driving the project forwards towards production.”

At 1132 BST, shares in ADM Energy were up 5.15% at 3.58p.