Norve jack-up rig - Vaalco - Gabon

Vaalco brings online the first of four wells in Gabon drilling campaign

Houston-based Vaalco Energy has completed its first of four wells in the 2021/2022 drilling campaign offshore Gabon and brought it into production with strong initial flow rates.

Norve jack-up rig; Source: Borr Drilling

The Etame 8H-ST development well was drilled from the Etame platform in the Etame field. This sidetrack well targeted existing Gamba hydrocarbons in the field that have not previously been produced by prior wells. The well was spud in December 2021, using a Borr Drilling-owned jack-up rig.

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Vaalco and Borr entered into a drilling contract in June 2021. While Vaalco did not disclose which rig will be used under the contract, Borr Drilling’s fleet status report shows that Norve rig is under contract with Vaalco.

As informed by Vaalco on Monday, the Etame 8H-ST well was completed and placed on production with a lateral of 162 meters in high-quality Gamba sands near the top of the reservoir. The well had initial flow rates of approximately 5,000 gross BOPD, but has been choked back to about 4,200 BOPD for reservoir management purposes.

The rig has now moved to the Avouma platform and will begin drilling the Avouma 3H-ST1 development well, the first of two planned development wells on this platform, which is also targeting the Gamba reservoir.

Vaalco is currently planning to drill four wells as part of its 2021/2022 drilling campaign. The company estimates the total cost of the 2021/2022 drilling campaign at Etame to be between $117 million and $143 million gross, or between $74 million and $91 million net to Vaalco’s 63.6 per cent participating interest.

Production during the fourth quarter of 2021 was approximately 7,550 BOPD NRI, or 8,700 BOPD WI, slightly above the midpoint of guidance for the quarter. Additionally, production for the full year of 2021 was 7,120 BOPD NRI, or 8,200 BOPD WI, also above the midpoint of guidance.

At the end of December 2021, Vaalco had an unrestricted cash balance of approximately $48.7 million which did not include $22.5 million of proceeds attributable to the December lifting that were collected in January 2022. The company continues to maintain a debt-free balance sheet.

George Maxwell, Vaalco’s Chief Executive Officer, commented, “We brought the Etame 8H-ST well online with very strong initial flow rates at an opportune time, with Brent selling near $90 per barrel. We are preparing to drill the next well in our 2021/2022 drilling campaign at Avouma, another development well targeting the Gamba reservoir.

“We continue to generate strong revenue which is allowing us to grow our cash position and fund our capital program with cash on hand and cash from operations.”