Hardman Resources Ltd has provided an update in respect on its production performance and plans for the Chinguetti oil field in offshore Mauritania, West Africa.
Hardman Resources Ltd has provided an update in respect on its production performance and plans for the Chinguetti oil field in offshore Mauritania, West Africa.
As previously announced, production for the period May 1 to May 10 averaged 45mbopd.
The average production for the period May 1 to 29 May reduced to 41mbopd.
Recent short term production constraints have not impacted reserves and there is now a plan in place to remediate restrictions to field performance.
The Operator has proposed drilling three new producer wells in the southern sector as being the most effective way to restore oil deliverability. Subject to materials and equipment availability, the drilling of new production wells will take priority over the exploration programme.
It is anticipated that the drilling of these new Chinguetti wells will start around October 2006.
Progress has been made in resolving outstanding facilities issues. Following the failure of one of the three gas compressors in early May, it is anticipated that the two undamaged machines will be recommissioned this week.
Operation of two out of the three compressors will allow gas lift of the production wells to begin and partial gas reinjection into the Banda reservoir to recommence.
The damaged compressor is unlikely to be available before August
Production is below forecast, although the rate of decline has slowed significantly.
The field operator, Woodside, has confirmed that it has not amended its estimates of oil reserves as a result of these recent short term production constraints.
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CHINGUETTI PRODUCTION - UPDATE AND REMEDIATION PLAN
Hardman Resources Limited (Hardman) provides the following update in respect of the
production performance and plans for the Chinguetti oil field, offshore Mauritania, West Africa.
As previously announced, production for the period 1 to 10 May 2006 averaged 45mbopd. The
average production for the period 1 to 29 May 2006 was 41mbopd, essentially from the four
wells in the southern sector of the field. Recent short term production constraints have not
impacted reserves and there is now a plan in place to remediate restrictions to field
performance.
Production drilling
The Operator has proposed drilling three new producer wells in the southern sector as being the
most effective way to restore oil deliverability. Subject to materials and equipment availability,
the drilling of new production wells will take priority over the exploration programme.
It is anticipated that the drilling of these new Chinguetti wells will start around October 2006 and
options to accelerate this timing are being explored, including batch drilling of the new wells in
advance of availability of completion equipment. The Operator advises that the well plans will
be finalised by early July.
Facilities
Progress has been made in resolving outstanding facilities issues. Following the failure of one
of the three gas compressors in early May 2006, it is anticipated that the two undamaged
machines, both upgraded, will be recommissioned this week. Operation of two out of the three
compressors will allow gas lift of the production wells to begin and partial gas reinjection into the
Banda reservoir to recommence. The damaged compressor is unlikely to be available before
August. Until that time gas handling capacity remains constrained and gas flaring will continue.
Additional options for de-bottlenecking the gas system to increase throughput are being
examined.
Production outlook
Production is below the Operator's forecast, although the rate of decline has slowed
significantly. Some further decline, mitigated by the provision of gas lift and by potential gas
facilities debottlenecking, can be expected before production stabilises in the next quarter. With
the drilling of each new well, the production rate is expected to increase by an average of at
least 10 mbopd, until natural decline commences. Further in-fill drilling, including resuming the
remainder of the Chinguetti phase 2 drilling (part of the original development plan), will be
undertaken in 2007.
Reserves
The field Operator, Woodside, has confirmed that it has not amended its estimates of oil
reserves as a result of these recent short term production constraints. Hardman is undertaking
a reserves review with an independent third party, Netherland, Sewell & Associates Inc., to be
completed by September 2006. This review will take into account the latest data, including the
deeper-than-prognosed oil water contact, which directionally would increase the estimate of oil
in place, as well as latest mapping of reservoir sand distribution. In light of recent well
performance, additional wells are needed to recover the reserve volumes and this will involve
additional costs.
All production figures reported above are gross.
