Erin Energy Achieves Peak Gross Production Rate Of 13,100bopd, Records $68.4m In revenue

Chairman and Chief Executive Officer of Erin Energy, Kase Lawal, has said that the company produced approximately 1.6 million net barrels of oil and generated revenues of more than $68 million.

He said even with the decline in commodity prices, 2015 was a year of significant milestones for Erin Energy, saying that the company completed the phase one of the Oyo expansion campaign, increased its reserves, and completed seismic acquisitions on two of its assets, which will help in high-grading the company’s exploration portfolio.

Lawal stated this in the company’s operational update.

“Our plan for 2016 includes the drilling of an additional development well to increase production, delaying some exploration activities, implement cost reduction by reducing our G&A and taking advantage of the low oil price environment to negotiate reduced cost of goods and services from vendors. We will continue to execute on the essential projects that will build long-term value for our shareholders,” he said.

In its operational update, the company said that in 2015, it successfully completed and tied-in Oyo-8 and Oyo-7 wells with production commencing in May and June, respectively. It noted that total oil production from the two wells in 2015 was 1.6 million barrels of oil, a 358% increase on 2014, saying that this was notwithstanding the impact of initial curtailment in production from the Oyo-8 well which necessitated total oil stored approaching the FPSO storage capacity while waiting for the export permit and the subsequent failure of the subsurface controlled sub-surface safety valve (SCSSV) after the permit was received.

The company also noted that following several unsuccessful attempts to open the valve by normal methods, the Company entered into a contract for the provision of light well intervention services, using the Island Constructor vessel to bring the well back to production. The Company said it expects to complete the intervention in April and re-establish production from Oyo-8.

According to the company, average net daily production for 2015, over the days production occurred, increased almost five-fold to 6,400 barrels of oil per day (bopd) compared to 1,300 bopd for 2014, adding that for the fourth quarter 2015, during which time Oyo-8 was shut-in, net daily production was approximately 2,500 bopd compared with nil for the comparative period in 2014.

The company said that sales for the year were 1.4 million barrels of oil, a more than three-fold increase from 2014. It noted that the average price received for the period, however, was $47.24 per barrel, a 125% drop on the average price of $106.41 for 2014, reflecting the decline in global oil commodity prices. Crude oil inventory, it said, was approximately 0.2 million barrels at December 31, 2015.

On its operations in The Gambia, the Company said it completed a 1,613 square kilometer 3-D seismic data acquisition over its offshore A2 and A5 blocks, noting that the seismic data is currently being processed and is expected to be completed mid-year 2016.

Also, in Kenya, Erin Energy said it completed the acquisition of 2-D seismic on its onshore Kenya blocks, L-1B and L-16, adding that the processing has been completed while interpretation is ongoing. The company also noted that based on the preliminary interpretation of the 2-D data, the Company applied for and was granted an additional two-year exploration period for the two blocks. The Company said it was also granted an 18-month extension of its Initial Exploration Period for its offshore Kenya blocks, L-27 and L-28.

Similarly, in Ghana, the Company said it completed its technical and commercial evaluation of the three previously discovered oil fields on the Expanded Shallow Water Tano block and announced total discovered in-place volumes were assessed at approximately 500 million barrels of oil and 282 billion cubic feet of gas. Erin Energy said it is working with its joint venture partners and relevant government entities on further optimization studies and adjustments to the fiscal terms in the agreement to enhance the economics of the development in this low oil price environment.

The Company said its total net proved oil reserves as of December 31, 2015 increased 32.4% to 12.0 million barrels (MMbbls), as against the 9.1 MMbbls at year-end 2014.

READ ALSO  OPEC August oil output hits 2018 high despite Iran losses, Reuters survey shows