UK: Trapoil Provides Romeo Well and Athena Acquisition Update
Trapoil, the independent oil and gas exploration and appraisal company focused on the UK Continental Shelf (“UKCS”) region of the North Sea, provides an operational update with regard to the Romeo well and the Athena acquisition.
Operations are continuing on the Romeo (Licence P.1666, Block 30/11c) exploration prospect (“Romeo”) (Trapoil 12.5 per cent. carried interest). Romeo is a four-way dip closure mapped at Base Cretaceous Unconformity with Fulmar sands as the reservoir objective, and with best estimate gross prospective resources for the entire prospect of approximately 44 million barrels of oil equivalent (“mmboe”) (3.3mmboe net to Trapoil unaudited estimate by Trapoil’s management). The well is being drilled by the Awilco WilHunter rig and has suffered operational and weather related delays. As a consequence, the well is currently some 16 days behind schedule. The well is still drilling to an estimated total depth of 15,180 feet Measured Depth Below Rotary Table (“MDBRT”) or 15,095 feet True Vertical Depth Sub Sea (“TVDSS”).
The partners in Licence P.1666 are Suncor Energy UK Limited (50.625 per cent., operator), Norwegian Energy Company UK Limited (21.875 per cent.), First Oil and Gas Limited (15.0 per cent.) and Trapoil (12.5 per cent.). Trapoil’s 12.5 per cent is a fully carried interest in the P.1666 Licence and as such Trapoil is fully carried in the Romeo well.
The well is being drilled as a joint well with Licence P.1816 (Block 29/15a) operated by Total E&P UK Limited (100 per cent.).
Trapoil has completed the acquisition of a 15 per cent working interest in the Athena Field on 21 December 2012 after securing an effective £6m reduction in the amount payable to Dyas UK Limited, calculated as a £2.7m reduction in the base consideration and a reduction of £3.3m to the capex payable by Trapoil. Trapoil’s management estimate remains that the most likely unaudited gross recoverable reserves attributable to Athena are in the low to mid ‘teens of million barrels with the ultimate number being dependent upon the recovery factor as a function of the sweep efficiency. It is not possible to narrow the estimate range until there has been a reasonable level of water production.
The Athena Field is currently achieving a steady production rate of approximately 11,000 bopd gross with no water production. At current production levels, associated costs and oil prices Trapoil’s monthly income from the Athena Field will be approximately £2 million and, as such, the Company expects payback on its investment in little more than a year, assuming no significant decline in production and a steady oil price.
Martin David, Technical Director of the Company, has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person under the AIM Rules. Mr David holds a BSc degree in Geology from the University of London and has over 37 years’ experience in the oil industry. Paul Collins, Chief Operating Officer of the Company, has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person, as required under the AIM rules. Mr Collins holds a BSc (Hons) degree in Fuel & Energy Engineering from Leeds University and a post-graduate diploma in Offshore Mechanical Engineering from Robert Gordon’s Institute of Technology and has over 28 years’ experience in the oil and gas industry.
Press Release , December 27, 2012