Production figures are quite telling of the deliverability of OMLs 60, 61, 62 and 63
Oando’s early November 2014 production update is a telling statistics on the potential of its newly acquired assets onshore central Niger Delta.
Weeks after the Nigerian independent reported a third quarter 2014 average of 46,070 BOEPD, its CEO told a large conference the production had surged to 53,546BOEPD.
Wale Tinubu told an audience of over 1,000 delegates recently, that the company’s average equity oil production in the first week of November was 21,547BOPD; gas production was 29,983BOEPD and Natural Gas Liquids contributed 2,016BOEPD.
In detail, production of oil had increased, by over 4,000BOPD, from the third quarter 2014 average of 17,506BOPD to 21,547BOPD, with gas sales upping from 25,799BOEPD to 29,983BOEPD, while NGL production dropped slightly from 2, 764 to 2,016BOEPD.
Oando had other assets which were collectively delivering less than 5,000BOPD net, before the acquisition of 20% equity in OMLs 60, 61, 62 and 63 from ConocoPhillips. Indeed, the company is particularly excited about the uplift in output from the deep-water Oil Mining Lease (OML) 125, in which it holds 15%. This is not part of the former ConocoPhillips assets. Production of the Abo field in that lease grew by 11% in the first nine months of 2014, over the entire 2013 average. “This increase was largely driven by increased production efficiency from producing wells and recommencement of production in the Abo 10 well in August rather than the planned September date”, Oando reports. But Abo field is a 21,000Barrel per day field where Oando has 3,150BOPD. At best, an 11% increase will add just about 500BOPD.
It is instructive that the difference of 7, 476BOEPD between average production for 3Q 2014 and the average production in the early days of November 2014, is largely from the assets which Oando took over from ConocoPhillips. This has ramifications in terms of the assets’ upside potential. One of the key questions during the sale of those assets was how readily production could grow. “Companies bidding to buy the equity were questioning the growth potential of output from these assets”, says Sam Ojibua, an upstream analyst focused on African resources. “A 4,000BOPD (net equity oil) increase in a 75,000BOPD asset in the space of three months is cheerful news”, he offers.