The Norwegian junior, BW Energy has reported gross production from the Tortue field offshore Gabon, averaged approximately 10,700 barrels of oil per day in the second quarter of 2022, amounting to a total gross production of approximately 975,000 barrels of oil for the period and in line with expectations.
But a key data in the company’s operational update is that “production cost (excluding royalties) was approximately $35 per barrel”, in the subject quarter.
BW Energy does not go any length to explain the reason for such a high number, but it notes that “the overall production cost includes approximately $1Million related handling of the COVID 19 pandemic in the period.
“Second quarter revenue is expected to reflect approximately 32,500 barrels of quarterly Domestic Market Obligation (DMO) deliveries with an under-lift position of around 247,000 barrels at the end of the period”, the company explains.
There were no BW Energy liftings from the Gabon operations in the quarter. “BW Energy had a cash balance of $123Million at 30 June 2022, compared to $111Million at 31 March 2022. The increase is due to the previously communicated April payment of $114Million for the Company’s March lifting, offset by continued investments in the Hibiscus / Ruche development project.
At the start of the period, the Company had commodity price hedges for a remaining total volume of 1.04Million barrels for 2022 and 2023, of which 37% is for 2022, BW Energy notes. “These were a combination of swaps and zero-cost collars that will allow for future cash flow stability for ongoing development projects. BW Energy has recognised unrealised crude oil hedge losses in the amount of $4.1Million for the second quarter”.