By Kiana Wilburg
Canadian Exploration Company, Eco Atlantic Oil and Gas Ltd., announced yesterday that it has made a second oil discovery in the Orinduik Block, offshore Guyana. Eco noted that the Joe-1 exploration well was drilled by the Stena Forth drillship to a final depth of 7,176 feet (2,175 metres) in approximately 2,546 feet (780 metres) of water.
It was noted by the company which holds a 15 percent working interest in the block that wireline logging and sampling of the oil found confirms that Joe-1 comprises of high quality oil-bearing sandstone reservoir with a high porosity of Upper Tertiary age.
Eco said, too, that Joe-1 encountered 52 feet (16 metres) of continuous thick sandstone which further proves the presence of recoverable oil resources. Furthermore, Eco, along with its partners Tullow which is the Operator of the block and French oil major, Total, will now proceed to conduct a detailed evaluation of the Jethro, Joe and Hammerhead extension oil reservoirs on the Orinduik Block.
The Company previously released a Competent Persons Report on the block, prior to the discoveries on the Jethro and Joe wells, defining Best Estimate of Gross 3.98B barrels of oil equivalent on the Orinduik Block (approximately 600 million barrels net to Eco).
Following the oil find, Chief Operating Officer (COO) and Co-founder of Eco Atlantic, Colin Kinley commented that the Joe-1 discovery has now opened up an additional play on the Orinduik Block that further defines the full potential for Eco and its partners in Guyana.
Kinley said that Eco’s initial interpretation, prior to drilling, defined over a dozen potential resource targets throughout the entire hydrocarbon section. The COO said, “We set a strategy to first focus on these shallower Tertiary plays as they have a huge positive effect on overall economics and allow a speedy path to production. Fast, low risk drilling to thick, clean, high porosity oil-bearing sands has decreased the drilling costs and greatly de-risks the development.”
Kinley also said that the new discovery in the Upper Tertiary has opened a new play as it turns out to be the first Upper Tertiary discovery in Guyana. He reminded that the Jethro-1 discovery was also the first in the Lower Tertiary section. “It has greatly increased our chance of success on our upcoming drilling targets and significantly de-risks other resources not previously considered in our interpretation,” the Co-founder stated.
Also expressing his satisfaction with the find was Eco Atlantic’s Chief Executive Officer (CEO) Gil Holzman. With Jethro and Joe as two proven oil discoveries on the block, in two separate horizons, and with multiple drilling targets ahead, Holzman said that this puts the company in a great place.
He said that Eco is well funded and budgeted to drill more prospects while noting that the Joe-1 discovery, only a month after the Jethro-1 discovery, is very material for the company as it has proven that its theory of shallow low-cost plays exists in Guyana.
The CEO said, “We are up-dip from the huge Exxon fields at Liza and Turbot areas, with good quality sands and oil that is clearly present on our block. Extrapolating the overall extent of the play, the quality and accuracy of our interpretation and the significant upside as defined in our CPR, we now have a clear path to making further discoveries, and additional shareholders value creation.”
Africa Oil which holds an approximately 18.8% equity interest in Eco was also elated with the discovery.
In fact, Keith Hill, President and CEO of Africa Oil commented, “We’re two for two on the Orinduik Block offshore Guyana which shows the enormous potential of this block.”
Hill said too that the Joe well opens up a new shallow Tertiary play which, combined with the 90% success rate in the lower Tertiary and Cretaceous plays in the block and the adjacent Stabroek Block, gives the partners great confidence that the multiple remaining prospects in the block will enjoy similar high success rates.
ORINDUIK JV PARTNERS
It was in January 2016 that Eco signed a Petroleum Agreement and is party to a Petroleum Licence with the Government of Guyana and Tullow Oil for the Orinduik Block offshore Guyana.
Tullow Oil as the Operator of the Block paid past costs and carried Eco for the first 1000km2 of the 2550km2 3D Survey. Further, Tullow contributed an extensive 2D seismic data set and interpretation.
The Company’s 2550 km2 3D seismic survey was completed in September 2017, well within the initial four-year work commitment the Company made for the initial 1000km2.
In September 2017, Eco announced that its subsidiary, Eco Atlantic (Guyana) Inc. entered into an option agreement on its Orinduik Block with Total, a wholly owned subsidiary of Total S.A. Pursuant to the option.
Total paid an option fee of US$1 million to farm-in to the Orinduik Block. An additional payment of US$12,500,000 was made when Total exercised its option to earn 25 percent of Eco’s working interest in September 2018.
Following the exercise of the option by Total, the Block’s working interests became: Tullow – 60% (Operator), Total – 25% and Eco – 15%. In October, last, the Government approved of the Total farm-in on the Orinduik Block, which has the potential for almost three billion barrels of oil equivalent.
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