VAALCO Energy (ticker: EGY), a Houston-based exploration and production company with operations in West Africa, has commenced production from its Southeast Etame/North Tchibala (SEENT) platform offshore Gabon. The Southeast Etame 2-H well returned 3,400 BOPD and is not producing any formation water or hydrogen sulfide – qualities that had existed in some previously drilled wells.
VAALCO is the operator of the permit area and owns a 28.1% working interest, amounting to 850 BOPD net to EGY. The company first discovered the region in 2010 and the Etame 2-H is the first development well to be completed. The rig is now being moved to the North Tchibala field, another EGY asset that has been delineated by previous wells but has yet to place any production online. That well is expected to be online by late September.
In a company release, Steve Guidry, chairman and chief executive officer of VAALCO, said the well is exceeding expectations and volumes are currently being tempered in order to gather additional data and information on the new reservoir.
VAALCO is scheduled to release its Q2’15 earnings on August 6, 2015 and will present at EnerCom’s The Oil & Gas Conference® 20 in Denver.
Including its net production from Etame 2-H with mid-June production levels, volumes increased by almost 20% to 5,250 BOPD. On a gross basis, volumes of 21,400 BOPD are already exceeding its expected 2015 peak rate. Operations from the SEENT field are targeting 7 MMBO of gross reserves and well costs are expected to range from $8 to $9 million. Measured depth on the Etame 2-H is 14,012 feet.
Two wells drilled north of the SEENT platform earlier this year returned gross volumes in excess of 3,000 and 2,000 BOPD, respectively. EGY has 100% operatorship of its properties and can adjust plans accordingly, but the company is well financed with $64 million in cash (as of Q1’15) and only $15 million drawn on its revolving credit facility. Additional exploration projects are currently underway offshore Equatorial Guinea and Angola.