LEKOIL

Investor news

19.11.2013

Ogo Drilling and Resources Update

Lekoil (AIM: LEK), the oil and gas exploration and development company with a focus on Nigeria and West Africa, and its partners Afren plc and Optimum Petroleum Development Ltd (together “the Partners”), announces the suspension of current drilling operations at the Ogo prospect located on the OPL310 licence offshore Nigeria and a significant upgrade to estimated gross mean recoverable resources compared to pre-drill expectations.

OPL310 is located in the Upper Cretaceous fairway that runs along the West African Transform Margin. Extending from the shallow water continental shelf to deep water, the block represented a wild cat exploration opportunity in an under-explored basin. Detailed pre-drill evaluation of the block identified several prospects lying in the same Turonian, Cenomanian and Albian sandstone intervals that have yielded significant discoveries in Ghana and Côte d’Ivoire. The first exploration well drilled by the Partners (the “Ogo-1 well”) was the Ogo prospect, a four-way dip-closed structure in the Turonian to Albian sandstone reservoirs, which was targeting 78 mmboe of gross P50 prospective resources. The drilling programme included a planned side-track well (the “Ogo-1 ST”), testing a new play of stratigraphically trapped sediments that pinch-out onto the basement high targeting 124 mmboe of gross P50 prospective resources.  In total, the Partners were targeting 202 mmboe of gross P50 prospective resources.

The Ogo-1 well was drilled to a total measured depth of 10,518 ft (10,402 ft true vertical depth subsea), and encountered a gross hydrocarbon section of 524 ft, with 216 ft of net stacked pay.  The Ogo-1 ST reached a total measured depth (TD) of 17,987 ft (12,050 ft true vertical depth subsea) and encountered hydrocarbon intervals in the same Turonian, Cenomanian and Albian reservoirs that were successfully drilled and logged at the Ogo-1 well. In addition, the syn-rift section encountered a 280 ft true vertical thickness gross hydrocarbon interval.

Based on the well data, the Partners estimate the P50 to P10 gross recoverable resources range to be significantly ahead of pre-drill expectations at 774 to 1,180 mmboe across the Ogo prospect four-way dip-closed and synrift structures.  This suggests potential net recoverable resources to Lekoil Nigeria, in which the Company's interest remains unchanged from the date of admission, of 232 mmboe (P50) and 354 mmboe (P10).  Additional upside potential is expected in the synrift play. In addition, the latest PVT (Pressure-Volume-Temperature) analysis confirms excellent reservoir fluid properties with a 40 deg API, 600 GOR, 0.42 cp viscosity oil in the Turonian, a 39 deg API, 870 GOR, 0.40 cp viscosity oil in the Cenomanian and a condensate rich gas in the Albian of up to 115 bbls/mmscf.  The Partners expect the synrift to contain a light oil or a condensate rich gas.

Whilst circulating bottoms up at TD, the drill string parted at 3,390 ft and during good progress towards recovery of the drill string from the well bore, the well took a hydrocarbon kick. After the kick was safely controlled, the Partners considered it prudent to move to permanently secure the well. 

The Partners intend to drill an appraisal well in H2 2014, ahead of development planning and will also increase 3D coverage on the block, currently covering only 25 per cent. of the block, to define further prospectivity.

Commenting, Lekan Akinyanmi, Lekoil’s CEO, said, “Today’s announcement confirms a very significant upgrade to the resources at Ogo compared with our pre-drill expectations.  We will continue to work with our partners to progress the Ogo discovery while also focusing on examining other opportunities to build our portfolio of assets.  Ogo has provided us with a flying start to our strategy to build a substantial, Africa-focused oil and gas business.”

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