Vaalco releases Vantage rig after completing Gabon operations

Houston-based oil and gas company Vaalco Energy has completed well workover operations on the South East Etame 2H well, located offshore Gabon, and released the Vantage-owned jack-up drilling rig.

Topaz Driller jack-up; Source: Vantage
Topaz Driller jack-up; Source: Vantage
Topaz Driller jack-up; Source: Vantage

Vaalco said in an operational update on Monday that the workover on the well restored production to 2,400 BOPD, in line with the production level before when the electronic submersible pump (ESP) failed in early March 2020.

The company added that it released Vantage’s Topaz Driller jack-up on 9 April 2020, and does not currently expect to perform any additional workovers to better preserve cash flow in the current uncertain environment.

With the completion of the 2019/2020 drilling campaign and the successful South East Etame 2H workover, total company production is approximately 20,000 gross BOPD – 5,400 BOPD NRI to Vaalco.

During the first quarter of 2020, Vaalco brought two new wells online – the South East Etame 4P and South East Etame 4H, experienced normal operational downtime associated with simultaneous production, drilling, and completion operations.

The company also brought production back online as a result of performing two workovers. Production for the first quarter of 2020 was 18,298 gross BOPD or 4,944 BOPD NRI to Vaalco which was near the high end of first-quarter guidance of 5,000 BOPD NRI.

Vaalco also stated that it had two liftings during the first quarter of 2020, one in January and one in February, but the next lifting for 85,000 barrels of oil that was scheduled for March was delayed to 1 April due to poor weather conditions.

As a result, the sales volumes for the quarter were down when compared to the fourth quarter of 2019, despite the higher production in the first quarter of 2020.

Cary Bounds, CEO of Vaalco, said: “We continue to execute operationally and have restored 2,400 gross BOPD of production with the successful workover of the South East Etame 2H well. We have now released the Vantage drilling rig after completing the successful 2019/2020 drilling campaign and executing two workovers that restored production from wells that were shut in due to ESP failures.

We are proud of the highly successful and transformational drilling program that has added meaningful production and significantly reduced our operating costs per barrel. For the first quarter of 2020, production was 4,944 BOPD NRI, which is […] our highest production since Q4 2015.

This gives us the confidence to reaffirm our full-year 2020 production guidance of 4,400 to 5,000 BOPD NRI. In addition, our strong production has helped to lower our operational breakeven cost of approximately $31.00 per barrel and, coupled with our current hedge portfolio, positions us well to navigate through the uncertain macro environment we face today.

Thus far, Vaalco’s operations have not been disrupted by the global COVID-19 pandemic, and we have managed through the logistical challenges that we have faced since the outbreak”.