– remain hopeful about commerciality of heavy oil finds
According to S.P Angel, one of the industry’s leading stockbrokers, the partners of the Orinduik Block will be targeting sweet, light crude discoveries for its next drilling programme. In its latest assessment, the UK stockbroker said that the partners have a number of targets in the Cretaceous layer which has yielded multi-billion-barrels of light sweet crude in the adjacent concession, being the Stabroek Block. In fact, 11 of its 22 targets are in the Cretaceous play.
With respect to the heavy oil found in the Jethro and Joe wells that were drilled back to back last year, S.P Angel recalled that the market was keen to express its disappointment as shares for both Tullow, the Operator and Eco Atlantic, a 15 percent interest holder, both dropped by more than 50 percent. Be that as it may, S.P Angel said the discoveries have been misunderstood by the market.
The stockbroker said, “Whilst analysis confirmed the Tertiary formation at Orinduik contains heavy, sour crude; the reservoir is high-quality, over-pressured and at a high wellhead temperature, all of which will help with the mobility of the oil.”
Eco Atlantic’s Chief Executive Officer (CEO), Gil Holzman has since highlighted that the crude tested to date from Jethro and Joe appear not dissimilar to the commercial heavy crudes currently in production in the North Sea, Gulf of Mexico, the Campos Basin in Brazil, Venezuela and Angola. This was also supported by S.P Angel and given further credence by commentary from Hess Corporation on its Tertiary Hammerhead discovery, which is heavier than the Cretaceous discoveries on the Stabroek block.
Holzman said that the partners being Tullow and Total, are still assessing the oil regarding its commerciality but based on the initial results, they remain encouraged. He said that more information in this regard will be released as it becomes available.
ORINDUIK JV PARTNERS
It was in January 2016 that Eco signed a Petroleum Agreement and became 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%.
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