San Leon Energy PLC Update on investment in Oza Field, Nigeria (6444N)
01 Octubre 2021 - 01:00AM
UK Regulatory
TIDMSLE
RNS Number : 6444N
San Leon Energy PLC
01 October 2021
1 October 2021
San Leon Energy plc
("San Leon")
Update on investment in Oza Field, Nigeria
San Leon, the independent oil and gas production, development
and exploration company focused on Nigeria, notes the announcement
made yesterday by Decklar Resources Inc. ("Decklar Resources") in
Canada.
San Leon has entered into a conditional subscription agreement
with Decklar Petroleum Limited ("Decklar Petroleum"), the local
subsidiary of Decklar Resources, which entitles San Leon to
purchase US$7,500,000 of 10% unsecured subordinated loan notes of
Decklar Petroleum and 15% of the enlarged share capital of Decklar
Petroleum. In addition, Decklar Petroleum and San Leon have entered
into an option agreement which, at San Leon's sole discretion,
entitles San Leon to purchase an additional US$7,500,000 of loan
notes and further Decklar Petroleum shares representing an
additional 15% of the enlarged share capital of Decklar Petroleum.
Further details of these conditional investment agreements can be
found in San Leon 's announcement of 1 September 2020. This
transaction is still awaiting final conditions precedents to
complete.
Parts of the text of Decklar Resources' announcement is set out
below:
"Oza-1 Well Re-Entry and Testing Update
-- The initial flow testing of the L2.4 sand resulted in a flow
rate of 10.3 million standard cubic feet of natural gas per day
("mmscfpd").
-- The initial flow testing of the L2.2 sand resulted in a flow
rate of 1,361 barrels of oil per day ("bopd").
-- The well is expected to be put on commercial production after
the completion equipment is installed.
Calgary, Alberta -- Decklar Resources Inc. (DKL-TSX Venture)
(the "Company" or "Decklar") is pleased to announce the following
update on the Oza-1 well re-entry at the Oza Oil Field in Nigeria,
being performed by the Company's wholly owned Nigeria-based
subsidiary, Decklar Petroleum Limited.
Following the previously announced successful re-entry of Oza-1
and the test results from the L2.6 sand yielding 2,463 bopd, the
Company has tested the remaining two sands, the L2.4 and the
L2.2.
During the initial flow testing of the L2.4 sand, the zone
produced at multiple choke settings ranging from 16/64 inch to
28/64 inch over the 25 hour testing period. The L2.4 sand is the
intermediate of the three target zones of the re-entry program on
the Oza-1 well and has 24 feet of gross hydrocarbon pay thickness.
The testing of the L2.4 sand yielded a flow rate of 10.3 mmscfpd of
natural gas of 0.58 specific gravity ("SG", air being 1.0) on a
28/64 inch choke setting and flowing tubing head pressure of 2,250
psig during the last three hour period of the five hour flow test
at this choke setting. In all tests there was zero basic sediment
and water ("BS&W"). The SG being 0.58 indicates the potential
for significant condensate yield and other Natural Gas Liquids
("NGLs"), which will form part of the Company's gas
commercialization strategy. With the regional gas pipeline
infrastructure network within five kilometers of the field, the
Company is excited for the opportunities the gas zone will present
for the joint venture to participate in Nigeria's transformational
gas utilization initiatives.
During the initial flow testing of the L2.2 sand, the zone
produced at multiple choke settings ranging from 16/64 to 28/64
inch over the 46 hour initial test period. The initial testing
resulted in a flow rate of 1,361 bopd of 20 degree API sweet crude
oil on a 28/64 inch choke setting and flowing tubing head pressure
of 346 psig during the highest rolling average three hour period of
the test at this choke setting. In all tests there was zero
BS&W and an average gas oil ratio ("GOR") below 150 mcf/bbl.
The L2.2 sand is the shallowest target zone in the well, with 20
feet of gross hydrocarbon pay thickness.
Decklar is evaluating artificial lift strategies such as gas
lift to enhance well productivity and plans to develop the L2.2
sand by drilling a horizontal well from the Oza-1 well pad drilling
slot location immediately after completing activities on the Oza-1
re-entry. The horizontal development strategy will be intended to
maximize reservoir connectivity while optimizing pressure drawdown
at the sand face, resulting in improvement to stabilized long term
oil production rates while minimizing both water and gas
influx.
The proposed Oza-1 well initial completion plan will utilize a
single tubing string completion string to produce from the L2.6
sand and immediately put the well on commercial production. The
completion will be designed with sliding sleeve technology that
will also allow production from both the L2.4 and the L2.2 zones in
the future.
The Oza Oil Field has significant export and production capacity
through processing facilities and infrastructure already in place
and operational, which is anticipated to allow for the immediate
export and sale of crude oil from the Oza-1 well."
"The foregoing test results should be considered as preliminary.
Readers are cautioned that the test results herein are not
necessarily indicative of long-term performance or of ultimate
recovery."
Enquiries:
San Leon Energy plc +353 1291 6292
Oisin Fanning, Chief Executive
Allenby Capital Limited
(Nominated adviser and joint broker to the Company) +44 20 3328 5656
Nick Naylor
Alex Brearley
Vivek Bhardwaj
Panmure Gordon & Co
(Joint broker to the Company) +44 20 7886 2500
Nick Lovering
James Sinclair-Ford
Brandon Hill Capital Limited
(Joint broker to the Company) +44 20 3463 5000
Oliver Stansfield
Jonathan Evans
Tavistock
(Financial Public Relations) +44 20 7920 3150
Nick Elwes
Simon Hudson
Plunkett Public Relations +353 1 230 3781
Sharon Plunkett
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