Vaalco hopes to restart Avouma production by year end
Houston-based oil and gas company Vaalco Energy is hoping to restart production at the Avouma platform at the Etame Marin Permit, offshore Gabon, by the end of the year following a shutdown caused by issues with an electrical submersible pump.
Earlier this year, Vaalco experienced issues at its Avouma platform well due to a recurring problem with an electrical submersible pump which forced the company to shut in the well.
The oil company reported on Monday, November 28 it mobilized a hydraulic workover unit onto the Avouma platform. The company added that work was underway to replace the failed electric submersible pumps (ESPs). The failed ESPs will be inspected by the original equipment manufacturer, who also installed the ESPs, to determine what caused the failures.
Cary Bounds, Vaalco’s COO and Interim CEO said, “We are also very pleased to have initiated the workover program at Avouma and hope to restore production at Avouma before year end.”
The company also on Monday said it closed the purchase of an additional 3.23 percent participating interest in the Etame Marin Permit. To remind, Vaalco Energy signed a purchase and sale agreement to acquire the additional participating interest from Sojitz Etame earlier this year with an effective date of August 1, 2016.
Vaalco added that the 3.23 percent participating interest acquired from Sojitz Etame represents the full interest owned by the company in the concession. Vaalco Energy is the operator of the fields in the Etame Marin block which encompasses approximately 28,700 gross acres in shallow water and, before the acquisition, owned a 30.35 percent participating interest (28.1 percent working interest) in the block.
There are four production platforms and nine wells currently producing in the concession, including three subsea well tiebacks. Production from the fields currently averages about 13,500 barrels of oil per day, and over 94 million barrels of oil have been produced since production began in 2002.
The company said that the acquisition would boost its net production by approximately 11 percent post-closing and would not require any additional staffing. The transaction was funded with cash on hand, but Vaalco may issue a request to the International Finance Corporation (IFC) to borrow the $5 million potentially available under its term loan agreement.
Cary Bounds, Vaalco’s COO and Interim CEO said: “We are very pleased to have closed our transaction with Sojitz and increased our participating interest in our flagship producing asset in offshore Gabon to 33.58 percent.
“It immediately increases our production in a field we know extremely well and enhances our option value due to the significant upside potential remaining. At Etame, we have identified 21 low-risk development and step-out drilling opportunities with about 65 million barrels of gross unrisked recoverable contingent resources. We are working with our partners on a schedule to develop these opportunities as soon as practical.”